The holiday season is finally in full swing with Thanksgiving coming up on Thursday. For airlines, that means the latest leg of their recovery is on deck, set to test their mettle against lingering staffing issues. All has gone well thus far with traveler volume close to pre-pandemic levels and cancellations remaining subdued.
As we approach the latter part of the fourth quarter, fare prices are expected to rise further. In fact, ticket pricing around Christmas is expected to match 2019 levels as some US airlines restore more than 90% of capacity through the end of the year. Higher prices appear unlikely to significantly impact demand as survey data shows a third of Americans already expect to pay more on holiday travel this year.
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Thanksgiving eve is upon the US travel industry, promising to be a significant test for airlines facing down projected passenger numbers nearly on par with pre-pandemic levels.
Per Barron’s, last Friday was the single busiest air travel day since the pandemic began with 2.2 million travelers passing through airport security checkpoints. In the five days between last Thursday (November 18) and Monday (November 22), more than two million passengers boarded flights each day. Data has not yet been published for Tuesday, but the last time the Transportation Security Administration (TSA) recorded six straight days of two million travelers was in February 2020.
Overall, the TSA expects to screen about 20 million passengers this week, compared to about 26 million in 2019. That will make up a significant chunk of the 53.4 million people expected to travel by road, plane and rail this week — up 13% from 2020.
US airline bookings for dates between November 20 and November 25 are up 78% from last year and 3% higher than 2019, according to a recent report from Adobe. The holiday season presents huge promise this year as travelers started booking for the holidays “earlier than ever before”, noted Alisha Kapur, senior travel manager for web analytics company Similarweb. The permanent shift toward working from home is also adding flexibility to travel schedules and lengthening the span of vacations. About 75% of travelers plan to add at least one day to their holiday trip because they can work on the road, according to a recent Deloitte study, cited by Bloomberg.
Demand is only expected to accelerate as we move deeper into the holiday season. While fare-tracking app Hopper says domestic fares will average $290 for a roundtrip around Thanksgiving, down 13% from 2019, Christmas fares are set to average $390, on par with two years ago. Per Business Insider, Hopper expects domestic ticket prices to rise 7% to $460 by December 11, and another 11% to $510 in the week leading up to the holiday.
United Airlines forecasts it will restore 77% of its capacity in the fourth quarter, while Delta forecast 80%, American 89%, and Southwest 92%, according to securities filings cited by CNBC.
The big question mark presenting a significant challenge for airlines is staffing. Currently, airlines are doling out bonuses and other incentives to maximize attendance. The cost of hiking pay is lower than the cost of cancelations and other disruptions. Thus far, that strategy has been working as, according to…
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