As cases in the US continue to rise, the domestic aviation recovery is feeling the pressure. The Delta variant has set airlines back millions are fares begin falling below pre-pandemic levels and traffic continues its downward slide. After a strong spring and summer, airlines are facing a choppy few months, but there are some opportunities for gains.
The dream summer is officially over. As airlines exit a lucrative summer, the dual storm of the Delta variant and lower passenger numbers is quickly hitting them. In the last few weeks, American and Southwest have announced that August earnings have taken a hit due to the highly infectious COVID strain, which has caused cases to soar to winter levels.
According to Forbes, passenger spending on flights has fallen rapidly since July and is now far below 2019 levels. July saw $5.26 billion spent on flight bookings, down 13% from June and 16% from pre-pandemic times. August has been even more brutal, with the month seeing $2.9bn in revenue to date, down 33% compared to 2019. June was the last strong month on record, with $6bn in sales and down only 5% compared to pre-pandemic.
Ticket prices have fallen alongside demand. After 16 months, ticket prices finally bounced back to 2019 levels in July. However, the Delta variant’s rapid spread has meant prices have fallen by 6% compared to pre-pandemic levels in the first three weeks of August alone. This means the steady increase in average prices from January to July has officially been broken.
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All eyes on Labor Day to see if US airlines can see a rebound over the weekend. However, the signs aren’t promising right now. Bookings for the weekend are down 16% compared to 2019 as of today. However, last-minute bookings have become the norm during the pandemic, which means not all hope is lost.
But last-in passengers may only help to compensate for the higher cancelation rate airlines are facing. With the biggest tourist states like Florida facing their worst-ever COVID surges, the appetite for travel could be much lower. For now, most signs point to a more muted labor day weekend for airlines, far from previous hopes.
While figures will comfortably exceed those seen in Labor Day weekend 2020 (2.29 million), they will fall far short of pre-pandemic levels. Post-summer blues are common for airlines, with passenger traffic falling after a high through June and July. However, with business travel absent to cushion losses, airlines will be feeling the pressure in August and September, if not longer.
In a spot of good news, TSA checkpoint figures beat 2019 levels for the first time in August 2021 last weekend. 29th August saw 1.9 million passengers pass through checkpoints, roughly 3,000 more than those seen in 2019. Sadly, the month at large has seen far lower figures. For now, airlines will be looking to navigate another choppy recovery as COVID shows no signs of disappearing with the summer.
What do you think about the US domestic recovery? When will things bounce back? Let us know in the comments!