Passengers Visiting Friends And Relatives Are Key To US Airlines

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The visiting friends and relative (VFR) customer segment is normally the domain of the budget airlines. However, as the corporate travelers remain at their home offices clocking up Zoom hours and the gates of Disneyland stay shut, US carriers across the board are looking to this tentatively rebounding clientele to generate some much needed short-term cash flow.

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The demise of the corporate traveler has lead to a race for the VFR traveler. Photo: Getty Images

A tentative upturn in VFR demand

The usually lucrative market of US business and leisure travel has come to a screeching halt during the COVID-19 pandemic. While video conferencing tool businesses are flourishing, airlines are suffering greatly from the loss of their most valued customers. As such, they are recalibrating to tailor better to passengers traveling to visit friends and family, the VFR customer segment.

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However, the momentary upswing in demand facilitated by the reopening of many states may again soon turn downwards as coronavirus cases in the US continue to rise. Designing route maps to correspond to such traffic is, therefore, a precarious endeavor. Nonetheless, several carriers are betting on the inclination of this customer group to travel, despite the evolving pandemic.

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JetBlue recently added routes to its network to cater to the VFR customer segment. Photo: JetBlue

JetBlue making a major play

The latest and perhaps most spectacular move in this direction came late last week, as JetBlue announced 30 new routes starting this summer and fall, specifically to

“serve customers in markets where leisure and VFR (visiting friends and relatives) travel is showing some signs of strength,” the airline said in a press release seen by Simple Flying.

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Many of the new services are focused on attracting people flying from the Northeast to Florida, Puerto Rico, and the West Coast.

“The markets we announced today are designed to take advantage of leisure demand we are beginning to see return and to more quickly generate cash,” Scott Laurence, JetBlue’s head of revenue and planning, said in an email shared with Skift.

Some of the point-to-point flying is a little unusual for us, but we saw the opportunity and wanted to take advantage quickly because we believe that these routes will be cash positive.”

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Ultra-low-cost-carriers such as Allegiant are mostly focused on point-to-point services catering to the VFR segment. Photo: McCarran International Airport

More pandemic-resilient segment

VFR customers differ from standard leisure travel in that they do not necessarily have a holiday budget to spend on their travels. They simply need a cheap ticket to get to their relatives or acquaintances, who can then host them, as opposed to renting an apartment or paying for a hotel room.

They are usually the domain of ultra-low-cost-carriers, such as Allegiant Air, Frontier, and Spirit Airlines. These carriers have lower costs, and can thus turn a profit offering a budget-friendly product. However, when short term liquidity is of the essence, and these are the people who are flying, you need to pivot towards where the cash flow is coming from.

 

The group may not be immune to the pandemic, but it is also not dependent on attractions or tourist destinations being open. It is most likely also a safer way to travel as it will mean less interaction with people all around than your traditional beach holiday or LAs Vegas weekend.

If this is enough to keep the group moving even as the pandemic is gaining momentum across several states remains to be seen. Florida’s 14-day quarantine for people traveling from the tri-state area may also dampen the VFR enthusiasm.

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