Are US airlines getting too far ahead of the market? There is so much news about bringing the fleet back, as well as the pilots – plus hiring more pilots. Schedules are being boosted. Southwest’s CEO is ‘euphoric‘ about a recovery. If there’s an industry that has been waiting for a recovery it has been the travel industry, and the airlines right at the front of that line.Â
We have noted signs of recovery and written about that. Does the data justify this rising confidence?Â
Look at the number of flights from 2019 through 4/20/21. The number of flights is recovering rapidly for US airlines. We just crossed the magic “100” line. There is much improvement since the slump a year ago. The airlines have slowly clawed their way back. But see that hump in 2020 for July and August? The industry had high hopes last summer that the market was going to grow back faster than it did.
That hump is what gives us pause. China also saw its initial recovery slowdown. India has just seen its pandemic numbers skyrocket. This is a second wave for India, but there is talk of yet a fourth wave to come. Vaccination rates is the key driver to watch. Even if the US airline’s focus is on domestic travel, it might be a good idea not to get too far ahead in this recovery. We understand the industry’s time-honored penchant for market share.
As the following chart illustrates, traffic is not growing back at quite the same speed as flights. We are still way below the magic “100” line.
A gloomy story about the air travel recovery will not endear us to our audience. So we will share one more chart that is more upbeat. Here we show a projection based on data that estimates a recovery to 2m travelers per day by about August 4. As new data comes in the chart is updated daily.
At 2m travelers, the industry will be close to its historic volumes. Obviously, if vaccination rates stay on course and if herd immunity is achieved plus if there is an economic recovery sufficient to drive job creation and consumer confidence, then, perhaps we see a much better travel market by 4Q21.  There are a lot of “ifs” in that long sentence.
It wasn’t so long ago people were talking about a recovery sometime in mid-2022. Everyone wants to get out of this pandemic but Covid respects nobody’s plans. Let’s not get too far ahead of the market.
