Like everyone else attached to the commercial aviation business, we have been wishing air travel to show a robust recovery. It isn’t happening. At least not yet.
Updating our model this morning note that the volumes are up – but just a bit. The daily volumes peaked (after the collapse) on June 1 at 353,261. Looking at our 90-day traffic forecast in the chart, we see that that “swoosh” is not happening. We are off the bottom, but only just.
The US air travel recovery looks anemic and, the slower the recovery is the worse off is the long travel industry funnel. How the greater travel-related economy gets through this damage will be very hard on nearly 16 million people. The public policy needed to get people traveling again comes with no easy or cheap options. And, in the end, it is a public policy issue. Every company in the travel funnel wants, desperately, to get back to work and keep its people employed.
The implication of the anemic recovery is that US airlines will keep struggling. As the pandemic seems to be waning, economic pressures are probably what is keeping passengers off airplanes. Though quarantines at either end also serves to chill travel interest. The current social unrest is certainly going to add to weak consumer confidence and not help bookings. Moreover, cheap gas and remote working allows people to consider a road trip rather than flying if they want to “get away”. And who doesn’t want to “get away” from their home quarantine now?
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