The airline industry’s recovery appears to be accelerating as travel demand comes roaring back. Despite rising jet fuel prices putting upward pressure on ticket prices, travelers are willing to spend more as they look to unleash a wealth of pent-up demand. COVID-19 cases in the United States have been subsiding for several months, further bolstering positive sentiment towards travel and leisure spending.
February bookings for US travel recently surpassed pre-pandemic levels and, if fuel costs stabilize, the upcoming summer season could one of the strongest ever. Delta Air Lines has announced the company is experiencing unparalleled demand for its services while United Air has recovered 70% of its 2019 business travel operations. The aviation industry appears confident in its ability to post strong revenue figures in the first half of the year, even though the second half of the year remains more questionable for some of the top US carriers.
Related ETFs: Defiance Hotel, Airline, and Cruise ETF (CRUZ), U.S. Global Jets ETF (JETS)
Travel Demand to Come Roaring Back in the First Half
As fears surrounding the COVID-19 pandemic begin to subside following Omicron’s momentous rise and subsequent fall, consumers appear ready to unleash their pent-up demand for travel and leisure.
According to a recent survey from Tripadvisor, 45% of Americans are planning to travel this March and April, including 68% of Gen Z travelers. That number will climb higher as the summer season rapidly approaches, as 68% of American adults will vacation this summer, per another survey by The Vacationeer.
The Vacationeer found that 25% of respondents say they intend to ‘revenge travel’, likely spending more money than ever before after being stripped of the opportunity to vacation over the last two years.
The aviation industry looks primed to receive a significant boost from consumers ready to spend big on travel plans. Reuters recently reported that US carriers are experiencing an “unparalleled” increase in demand which has resulted in Delta Air Lines reporting the highest ticket sales in the company’s history last week.
Delta’s competitors United Airlines and American Airlines also stated demand for their services is higher than it has ever been, noting that business traffic is rebounding faster than expected.
According to The Hill, American Airlines CEO Doug Parker said that the carrier recently had multiple days of sales that were 15% higher than previous records, showing travel demand could be nearing multi-year highs.
Last month, domestic flight bookings surpassed pre-pandemic levels for the first time, with travelers spending $6.6 billion on flights in February, 6% higher than the same month in 2019. Katherine Estep, spokesperson for Airlines for America, noted that travelers have been eager to book tickets as “COVID-related restrictions in all 50 states have been lifted”, which is likely to…
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