 "Upward Trend in Bookings Leads Airlines to Expanding Routes and Services")
Upward Trend in Bookings Leads Airlines to Expanding Routes and Services
Airlines expanding routes and services as the world’s airline industry is seeing an upward trajectory in bookings, leading to an optimistic expansion of routes and services in 2022.
With some airlines offering more capacity and new tickets sales rising, one industry analyst predicts airline revenues will turn positive in the second half of 2022, compared to the same quarter as 2019.
Delta, in recent reports, forecast profits returning by this March, with no adverse effects on booking in the U.S. from the Omicron variant past the President’s Day holiday weekend in mid- February. United Airlines also reported that March travel bookings have stabilized the demand for transatlantic travel during the summer is exceeding 2019 levels. American Airlines announced it is beginning to see an uptick in reservations.
Global traffic, passenger airline departures are up
The news comes as airlines are adding new lift from destinations around the world. The International Civil Aviation Organization (ICAO) published its latest forecasts in which it indicates that global air traffic should return to between 69% and 74% of its pre-crisis level in 2022, against 51% in 2021 and 40% in 2020.
In the U.S., passenger airline departures were at about 85 percent of pre-pandemic levels for the second week of January, with international flight rates just trailing the number of domestic flights operated that week according to a weekly report, “Emerging from the Pandemic,” produced by Airlines for America (A4A), a trade association for North American airlines.
TSA checkpoint volumes were at about 75 percent of 2019 levels in mid-January, as throughput nears the levels of two years ago, the report said.
Four U.S. airlines—JetBlue, Allegiant, Frontier and Spirit—were offering more capacity in the first quarter of 2022 than the same period of 2019.
“It’s been a bit of a roller coaster,” said John Heimlich, A4A’s Vice President and Chief Economist, adding he anticipates airline revenues will turn positive in the second half of 2022, compared to the same quarter as 2019.
New ticket sales have also been rising, though demand for corporate and long-haul international air travel is still working its way back, leaving revenues lagging, according to the A4A report. In the first half of November, the U.S. had reached almost half the corporate travel ticketing that it saw in 2019.
“We’re not back to 2019 levels on volume or fares, so therefore we are not back on the more important metric which is operating revenues,” Heimlich said. “We hope 2022 will be a profitable year.”
Which Routes Are Performing Well?
People are eager to travel, with long weekends and holidays performing best, according to Heimlich. In December, demand was notably strong in the outdoor-oriented locales such as of Montana, Wyoming and the U.S. Virgin Islands.
“We’ve done very well with Mexico and the Dominican Republic—places that are shorter haul, leisure oriented, unrestricted and VFR (visiting friends and relatives) oriented,” Heimlich said.
In December, Cancun and London Heathrow were the busiest foreign air-travel gateways to and from the U.S. There have been more departures to Mexico than pre-pandemic.
With business travel still down from pre-pandemic levels, airlines are changing their routes and strategies, said Jay Sorensen, president of the IdeaWorksCompany, which specializes in brand development in the airline industry.
“The model used to be that you attempt to serve a route at least daily or six days a week and that business routes needed more frequency than that because they needed flights to align with their business schedules, especially on the shorter routes,” Sorensen explained. “Now network airlines—American, United, Lufthansa, Air France, Singapore—are not serving routes every day. They are choosing days of the week more attractive to leisure travelers and putting more frequency there. That is something new; that is something they learned from carriers like Frontier and Allegiant.”
While leisure travel is nearly back to 100 percent, one business traveler leaving the system has to be replaced by three or four leisure travelers to keep the revenue neutral, said Ben Baldanza, an economist and former CEO of Spirit Airlines interviewed prior to the merger announcement between Spirit and Frontier.
To compensate, both Sorensen and Baldanza agree the trend is leaning toward fewer business class seats and more premium economy, which can accommodate more passengers.
“The price difference isn’t as great going from economy to premium economy than economy to business class, so it wouldn’t surprise me if you saw a trend of more premium economy and a little less business class,” Baldanza said.
Delta and other airlines are reporting domestic business travel is about at 60% of what it was in 2019, Baldanza said.
“The question is, is it going to get back to 100 percent of 2019? I think it will,” he said.
New Flights
Here is a sampling of new flights to and from US and international airports to destinations with ALHI member properties.
United States
ATL Atlanta AMS Amsterdam (Delta) AUS Austin AMA Amarillo, Texas (Southwest) BOS Boston AVL Ashville (Jet Blue) ORD Chicago MXP Milan (United) DFW Dallas-Ft. Worth BOS Boston (Delta) DEN Denver CZM Cozumel, Mexico (Southwest) FLL Fort Lauderdale PUJ Punta Cana, Dominican Republic (Southwest) RSW Fort Myers, Fla. FRA Frankfurt (Lufthansa) Hawaii
| LAS Las Vegas
MIA Miami
MKE Milwaukee BOS Boston (Jet Blue) New York (ERW, JFK, LGA) ERW Newark to DUB Dublin (United) JFK New York to AMS Amsterdam (Delta) JFK New York to MCI Kansas City (Jet Blue) LGA New York to BNA Nashville MSY New Orleans LGA New York (Jet Blue) OKC Oklahoma City AUS Austin (American) SLC Salt Lake City AUS Austin (American) San Francisco (SFO) ASE Aspen/Pitkin County Airport (United) SEA Seattle LHR London (American) IAD Washington, D.C. SXF Berlin (United) |
International
AMS Amsterdam ATL Atlanta (KLM) CUN Cancun AUS Austin (American) DOM Dominica MIA Miami (American) FRA Frankfurt BER Berlin (Lufthansa) GDL Guadalajara MAD Madrid (Aeromexico) LHR/LGW London ATL Atlanta (Delta) | MEX Mexico City CUN Cancun (Volaris) MBJ Montego Bay LHR London (Virgin Atlantic) MUC Munich SXF Berlin (Lufthansa) NAS Nassau, Bahamas AUS Austin (American) CDG Paris ATL Atlanta (Air France) |
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