JetBlue, Spirit Airlines say leisure flyers beginning to return — slowly
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A few Americans are beginning to travel again for reasons other than essential work during the coronavirus pandemic with JetBlue Airways and Spirit Airlines each reporting a slight uptick in passengers.
Both New York-based JetBlue and South Florida-based Spirit are seeing slight improvements in May passenger numbers, executives reported during separate first-quarter earnings calls on Thursday. While both emphasized the gains were modest, the improvements give hope that a more meaningful recovery is in the offing as concerns of COVID-19 lessen.
“We’re simply finding is people are starting to want to move around a little bit,” said Spirit commercial chief Matthew Klein. “As long as they’re traveling in a safe way, we’re starting to see that come back a little bit.”
The green shoots are a positive sign for an industry hard hit by the pandemic. Airlines have cut the number of domestic flights by more than 73% in response to the near disappearance of demand during the week ending May 5, according to trade group Airlines for America (A4A). Passenger traffic was down nearly 96% year-over-year over the same period.
Most carriers have cut schedules through June, with executives universally saying they do not know when people will want to fly again in large numbers. Surveys show many potential travelers will wait for a broad relaxation in shelter-at-home and other restrictions before they will consider flying.
JetBlue is flying around 100 flights a day, or about 10% of its originally planned schedule, president Joanna Geraghty said Thursday. The airline has not regularly flown that few flights since 2002 — just its second year of operation — according to U.S. Bureau of Transportation Statistics data.
“We’re starting to see some very small improvements in bookings but… it’s too early to tell if there’s a change in the trend,” said Geraghty. The improvements are primarily on flights between the northeastern U.S. and Florida.
Both JetBlue and Spirit pointed to the “visiting friends and relatives” market — dubbed “VFR” traffic within the industry — as leading the uptick in travel so far.
Spirit is optimistic that more people will begin flying soon. The airline plans to resume some flying in June, walking back a planned 95% year-over-year capacity cut slightly to down just 90% compared to 2019.
“We expect the demand for travel in the summer to rebound a bit but still be significantly below last year,” said Klein.
These trends fit general expectations that domestic leisure travel will return before business or international travel. This benefits leisure-oriented airlines like JetBlue and Spirit, but poses challenges for carriers like American Airlines, Delta Air Lines and United Airlines that depend more on higher-fare business travelers.
The so-called “big 3” of the U.S. have all cut schedules dramatically through June, with United planning to operate just 10% of the capacity it flew a year ago.
The modest uptick in May passenger numbers comes as airlines continue to wrack up first quarter losses. Net losses at JetBlue totaled $268 million and at Spirit $28 million during the three months ending in March.
Featured image by Angus Mordant/Bloomberg via Getty Images.
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