Summer is traditionally peak season when airlines are the busiest. It’s heavy leisure travel season, when people fly internationally to Europe and beyond. And that season ends around Labor Day. Yet air travel this summer has plateaued around 25% of last year’s passenger volumes.
Throughout June things were improving for domestic flying, at least, but the recovery in air travel largely ended after that. Covid-19 cases grew in the United States. Cities and states imposed quarantine requirements for arriving passengers that have kept people away.
And we’re approaching the end of peak leisure travel without business travel coming back in behind it to make up some of the difference. Offices remained closed or at less than full capacity. Companies are keeping people off the road, and they don’t have clients in offices welcoming visitors if if they weren’t. The meetings industry is basically non-existent. And international premium business isn’t returning either – even if other countries would welcome American business travelers.
American Airlines Senior Vice President Vasu Raja explained to employees on Wednesday how crucial business travel is, how their route network is changing, and that right now they’re just looking to make it to and through next year.
The nature of business travel which is so critical to international is changing before our very eyes..we’re going to be smaller next year because demand is going to be down.
…Right now between our own network and our partnerships, the American Airlines is going to come out of this crisis is going to have a lot more places to launch widebodies, and because we have a simplified widebody fleet – we have 787s and 777s – anything can go anywhere. Before we were limited where we had 330s but those things could only fly in Philadelphia… next year it’s going to look different, there’s no going back, the world has changed. But the more we can make it to next year and through next year which we will do, the more we set ourselves up for success.
In answer to another question though, Raja emphasized that September is going to be worse than June – and what schedule changes will result for his airline.
As we get into September there’s less demand than there was back in June and interestingly what we’re seeing is where that demand is weakest is all of the markets that are most dependent on business. In September where Miami gets seasonally weak as we get into hurricane season, what we’ll do is we’ll take out the Northeast a lot more, LA a lot more because that’s what depends on business and we’ll take out Miami a lot more. That’s not a permanent reduction by any means.
Flights between business travel markets will be reduced this fall, precisely when business travel is supposed to take over for leisure in the airline business. September is, as Raja says, likely to be worse than June for his airline – and for the U.S. airline industry as a whole.
October might even be worse with layoffs, service decline, mask fatigue that makes people avoid flying, pre-election tension, no big conferences, annual flu season starting to set in in the Northern hemisphere, no cruises to warm places to draw cruise passengers to fly to places like MIA/FLL not to mention the lingering effects of the self inflicted economic disaster we have created. Good news is maybe airline fares and award space will be good.
I don’t think quarantine requirements have much effect domestically. Most people aren’t traveling due to the surge of cases. FL is a colossal mess. Except for a few nuts, no sane person is going to risk their family’s health in going to Disney World. Getting sick in a state where hospitals are very crowded and possibly stuck there while someone recovers (even if it isn’t the virus) would be a mess.
Despite all of the “flying is safer” comments, most people don’t think so. And those that might fly are turned off by over crowded flights (obviously many aren’t) and idiots who don’t respect your health.
The government keeps trying to pretend the economy is ok but they are giving away money, buying stocks/bonds to keep prices up, etc. It is a house of cards to fall. I personally don’t care about political views but clearly Donald Trump has been a failure at almost every negotiation and act he has attempted and his family are mostly a group of colossal idiots.
Whether it is the virus situation or the mideast plan Kusner attempted, it is a complete and utter embarrassment. Sadly kids will be paying for this for years. I have my money and job and will sit back and watch the disaster to continue to unfold.
Too many clueless people seem to view the virus from the beginning as a joke or something that one day just disappears. Almost like someone who got a serious illness or tragic event wakes up everyday thinking it was just a terrible dream and things are now back to normal.
I hope things will improve but it might help to actively do something more than just hope. Whether it is the debt/deficit/virus/infrastructure/jobs/etc. the country is facing a tough mountain to climb and people today just want things given to them.
I think the big question mark really comes this fall with the start of flu season. If covid-19 cases rise again in places like NY/NJ/CT then I pretty much think 2021 may be very similar to 2020. If there is no surge in cases, then I think people will feel safer to fly come 2021.
Days of OPM flying are numbered. Remote will be the way forward.
The old people who insist on face-to-face will be phased out as new technology comes along and young people will take over the business world who value home life vs flying constantly to see clients, make endless powerpoints for pointless meetings for their corporate overlords
This young guy will go crazy if he’s not on the road all the time. I think you’re off base if you assume all of us Millennials and younger want to be home all the time. There has been nothing enjoyable about the last 4 months for me and many of my friends feel the same. Sure there are some people that travel for work because they have to, but others have it in our genes to me moving and working constantly. We’re restless if our heads are on the same pillow too many nights in a row.
David and Bob are both right, haha. The split of opinions within my employer is very stark along generational lines. All of the senior leadership has been burned out by decades of travel and the last 4 months they’ve spent holed up in their mansions or beach/ski/lake houses while drinking wine by the fire with their families has been the best thing since sliced bread. Meanwhile the junior colleagues who enjoy the excitement of the road have gone stir-crazy locked in their 700ft2 apartments without any of the things that made work interesting – meeting C-level clients, traveling, staying in nice places, eating well, working in person with teams, etc. If those same junior colleagues had been there another 10 years they’d be thinking like Bob, but right now they’re thinking like David.