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Demands for air travel are up this summer, but can the airlines handle it?

The demand that we’ve seen over the last five weeks has been historic. We’ve never sold more tickets in any period in [our] public history.” 

--- Ed Bastian, CEO of Delta Air Lines (April 2022).

 

Have you booked a ticket for summer travel already? You might regret it if you have not done so yet. I was shocked to see that the ticket I tracked from the greater L.A. area to Orlando in June had gone from $300 to $1,200 in just a few weeks. As a reference, I could usually find a round-trip economy ticket between L.A. and most destinations in Europe and Southeast Asia for $600 - $1,000 before the pandemic. 

 

It’s not just the price; the pace is picking up too.

 

American Express just released its first-quarter report (Demos, 2022), showing that American consumers are fueling the recovery. Large corporate travel spending or international consumers, however, have not yet resumed to the 2019 level. Here are a few highlights:

 

  • Americans spent 20% more on travel & entertainment (T&E) in the first quarter of 2022 than in the same period of 2019 after adjusting for exchange rate moves. 
  • U.S. consumers’ travel bookings were up nearly 50% compared to 2019. 
  • Millennials and Gen-Zers led the recovery, up 56% than 2021. 
  • Millennials and Gen-Z cardmembers also used the $200 hotel credit benefits twice as often as the other groups. 

 

Can airlines meet the surging consumer demands? 

 

The airline industry faces many changes still (Chokshi, 2022; Georgiadis & Ch├ívez, 2022). Besides the rising fuel prices, the labor shortage will linger for a while. For example, American Airlines only hired 600 out of 2,000 pilots it aimed to bring on board so far. The airline is also dealing with a lawsuit launched by the union representing the pilots. Heathrow, the U.K.’s busiest airport, is now looking to hire an additional 12,000 workers to cope with the surging demands in the summer. Despite the high demands in the summer, many airlines must trim their schedules to avoid cancellations or delays.  

 

An uneven recovery might turn out to be good for the airline industry.

 

As suggested in this magazine’s April issue, countries and destinations across the globe would experience a different pace of recovery due to the destination’s reopening agenda. When North America and Europe are opening up ahead of others, getting seasonal workers through temporary non-immigrant working visas can be a short-term solution. 

 

Besides higher prices and busier traffics, what else do you anticipate in air travel this summer?


Note: This viewpoint was first published in the Hospitality News Magazine - Hotel, Dining, and Eatery Trends; The picture was downloaded from The Guardian

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