Global air travel unlikely to recover until 2024 as COVID remains 'issue' in US, elsewhere
The prognosis for airlines keeps getting worse. The latest comes from the International Air Transport Association, where the organization's latest forecast now pushes a recovery to pre-coronavirus pandemic levels off by at least a year.
IATA, the trade group representing airlines globally, does not expect the number of flyers to return to 2019 levels until at least 2024, the organization's chief economist Brian Pearce said Tuesday. The group previously forecast a 2023 recovery.
"Ahead of any vaccine, it really does depend on how well countries manage to control the virus," said Pearce. "That is clearly going to be an issue with the recovery. What we haven’t seen is the sort of progress that we need."
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IATA is just the latest to push back its timeline for a recovery in air travel. In recent weeks, Goldman Sachs and other Wall Street banks have done the same, though most anticipate that at least domestic travel could recover by around 2023.
In the U.S., the recent resurgence of COVID-19 infections particularly in states across the South and West — plus new travel restrictions — has taken a bite out of the nascent recovery. Since the beginning of July, data from trade group Airlines for America (A4A) shows net passenger bookings — new reservations minus cancellations — holding steady at down around 80% compared to 2019 levels.
American Airlines, Delta Air Lines and United Airlines and others have all acknowledged this and have begun to pare their schedules for August and into the fall. Even Southwest Airlines, which had planned to fly a nearly "full" schedule by year-end, now plans to be about a quarter smaller by December compared to the end of 2019.
Related: Air travel recovery may come slower than expected
In addition to the trajectory of the pandemic, IATA cites traveler confidence as an important driver of air travel recovery. COVID-19 has depressed both business and consumer confidence, with the added stress of economic malaise and rising unemployment dragging down the latter, Pearce said.
The U.S. unemployment rate stands at over 11%, which is historically high and above the 10% rate hit during the Great Recession.
There is some hope. Hard-hit JetBlue Airways, which flies primarily along the East Coast — a market that Cowen analyst Helane Becker has nicknamed "quarantine corridor" — expects many of the these markets to come back strong when restrictions ease and travelers return.
Related: JetBlue says flyers want empty middle seats, international flights coming to LAX
"When these regions stabilize, we expect they will support our recovery given the pent up demand we saw for travel," JetBlue president Joanna Geraghty said Tuesday, speaking about the airline's flights between the Northeast and Florida and as well as its transcontinental routes.
However, JetBlue plans to be roughly a third smaller than it was last year at the end of December, and is preparing to be a smaller airline after the pandemic.
“There is some [potential] upside but we do think that the bulk of the uncertainty, the risks are probably more on the downside over the next few years," Pearce said about IATA's forecast.
Related: United Airlines worries travel recovery will stall until there’s a COVID vaccine
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.