As governments lift pandemic-era restrictions, the US airline industry appears to be on the fast track to recovery, and airlines are set to raise fares to offset inflation.
The Adobe Digital Economy Index, which uses online sales from six of the 10 largest airlines in the United States, Saw ticket sales For domestic flights in February exceeding those in February 2019.
February 2022 – which saw travelers spend about $6.6 billion on domestic flights – marks the first time since the start of the pandemic that airlines have seen more bookings than 2019 levels.
“We’re seeing things open up in terms of people thinking about travel,” said Vivek Pandya, who led the analysis. “The question now becomes: How far can this momentum go forward?”
Bookings rose six percent in February, while tickets sold rose four percent and fares increased five percent, which lags behind recent inflation.
Travel numbers through TSA checkpoints, while not quite at 2019 levels, were very close to the year before the pandemic and much higher than they were at the same time in 2020 and 2021.
People line up at the Delta Air Lines ticket office inside Terminal 2E at Paris Charles de Gaulle Airport in Roissy, after the United States banned travel from Europe in March 2020.
However, there are concerns that rising fuel prices and persistent inflation may force airlines to increase fares and discourage people from flying.
“Between the impact of fuel and the impact of discretionary income on leisure travelers, whatever was going to happen is going to slow down,” said Samuel Engel, senior vice president and airline industry analyst at ICF, a consulting firm.
JetBlue, which expects revenue to decline 6 to 9 percent this year — a brighter outlook than the original internal forecast of 11 to 16 percent — said it would moderate its plans due to higher fuel prices.
Delta — which will be insulated from any fuel cost increase because it owns a refinery in Pennsylvania — said. That raises prices from $15 to $20 Or about 7.5 to 10 percent of the original cost could offset these increases.
However, the travel boon is driven by people who go on vacations – the so-called ‘leisure travelers’ – and they could be what is holding back that revenue from growing.
“Overall, growth may slow or, as currently stands, the capacity that airlines would have had if the pandemic continued to ebb will not,” wrote Helan Baker, airline analyst at investment bank Cowen. A recent research note.
Even after hitting a record high last Friday, the average cost of a gallon in the United States still lingers in the middle of the $4.00 range — approaching $6.00 in hard-hit areas, such as California.
Delta Air Lines executives said they expect revenue to exceed their estimates in the first quarter of 2022.
Virgin Atlantic CEO Shay Weiss and Delta Airlines CEO Ed Bastian (pictured right) meet to discuss international travel at the RAC Club in London on March 15
Adobe also said that March looks set to see much of the same increases as February.
Travel numbers through TSA checkpoints, while not quite at 2019 levels, have been very close to the year before the pandemic in recent weeks and much higher than they were at the same time in 2020 and 2021.
Airlines have been waiting to see where the year will start in hopes of getting a big boon for the travel industry for summer 2022. The number of tickets sold in February for travelers between June and August this year fell by only 3 percent from February 2019. .
As of Monday, airlines will have more than 2.1 million domestic flights scheduled during the summer months, aviation data provider Cirium said. This is just eight percent less than flights scheduled during the same months in 2019.
In the summer of 2021, scheduled flights were down 16% from the summer of 2019.
US and Delta executives said at an investor conference that they saw record daily sales last week.
Delta also said it expects revenue to beat its estimates in the first quarter of 2022.
While fuel prices are causing panic in many industries, a US executive said the increase in revenue will offset this.
Gas prices on Wednesday morning averaged $4.30 a gallon — up from $2.86 just a year ago.
Russia’s war on Ukraine – which is blamed for soaring fuel prices – could slow trans-Atlantic travel and around the world if it continues.
“What we’ll end up with is a homegrown summer that looks pretty good rather than great,” Engel noted.