We are seeing a downturn in air traffic during the first two weeks of 2022.  The question is why?

The year 2021 saw a slow recovery of air traffic in the United States, returning to nearly pre-pandemic levels on several days during the holiday period in the 4th quarter.  But 2022 hasn’t started as well for airlines, with the Omicron variant and its high rate of contagion providing added concerns.

January and February are typically slow months for airlines, as can be seen in the 2019 data in the following chart.  But through the first 12 days of 2022, we are seeing a more precipitous drop, showing a similar pattern to the massive drop-off in traffic in March of 2020.  The question for 2022 is whether the downturn in air traffic will level out over the next week or continue and result in another major industry recession.

downturn in air traffic

Our information suggests that advance bookings have not been weak enough to cause a major downturn in air traffic and that a leveling off is likely soon.  However, passengers may be rescheduling trips for later in the year, rather than risk crowded airports and aircraft where the virus can be transmitted.  Airline policies that have provided additional flexibility to change flights for pandemic-related causes may be fueling the postponement of planned travel, despite pent-up demand in the market.

With news media hyping flight cancellations due to pandemic-induced staffing shortages and winter storms, the impression that flying is now unreliable and that one might get stuck at an airport for several days can scare travelers into staying home.  If anything goes wrong with air travel now it is front-page news.  The downturn in air traffic early in 2022 has certainly also been impacted by winter storms and flight cancellations due to both weather and staffing.

Nonetheless, the shape of 2022 traffic decline is remarkably like that during the great decline in March of 2020.  While we do not believe traffic will fall as precipitously in 2022, we will be keeping a close eye on the situation.

Our AirInsight Airline Performance Index has also fallen recently, as shown by the significant number of red numbers, showing a decline, for recent weeks in the table below.  This is remarkably different from the holiday period, during which most boxes were green and showing improvement.

decline in air traffic

The following graph of our performance index shows that even with the daily volatility, the index has flattened and turned downward in early 2022, as illustrated in the graph below. 

decline in air traffic

The Bottom Line

Air traffic will need to be watched quite carefully over the next two weeks to determine whether the downturn in air traffic is a temporary phenomenon or a harbinger of more troublesome times for the industry.

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President AirInsight Group LLC

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