Airline Industry Prepares for a Busy Holiday Travel Season

Airlines Industry Sees Signs of Recovery After Mid-September Dip

The airline industry is shrugging off a recent slump in travel brought on by the Delta variant of COVID-19, betting that the holiday season will drive an increase in bookings. Airlines had a strong summer thanks to pent-up demand. Then bookings took a hit as cases of the Delta variant of COVID-19 increased. With COVID-19 cases declining and consumer spending rising, the airline industry is preparing for strong demand during the holidays.

Demand for flights is still lower than what it was at the end of July, but bookings have picked up from the lows seen in the middle of September.

Airlines Expect a Strong December

That has been the case at Hawaiian Air (HA), which said cancellations have slowed and bookings are starting to recover. The airline expects to be in the throes of a “strong solid recovery” by Thanksgiving and Christmas. Meanwhile Delta Air Lines (DAL) said it expects demand for travel in the US to exceed pre-pandemic 2019 levels in 2022. JetBlue (JBLU) also expects the holidays to be strong.

To prepare for increased demand, some of the airliners are adding flights to their schedules.
United Airlines (UAL) is among them. The company said last week it would add over 3,500 domestic flights in December. It represents about 90% of United’s capacity for domestic flights in 2019.

Business Travel Remains a Question Mark

Despite the rosy outlook for domestic consumer travel, airlines are not as sure when a recovery in the business market will start. Business travelers are more profitable for airlines and accounted for half of passenger revenues prior to COVID-19. Airlines were optimistic that once offices were reopened, business travel would resume. But many corporations postponed their reopening plans, dashing hopes of a business travel rebound this year.

The airline industry says eventually business travel will recover, but when this will happen is up for debate. United is betting it will happen in 2023 while JetBlue says a recovery is a few years out. Either way, with the holidays around the corner and COVID-19 cases declining, airlines are preparing for some holiday cheer.

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