Headlines over the 4th of July weekend highlighted that US airline traffic reached pre-covid levels, but this was a bit of an apples to oranges comparison.  In reality, we’re not back quite yet. 

Travel varies considerably by day of the week, and dates fell differently from 2020 to 2021, with the high 2021 traffic on a normally heavy day and the 2019 date it matched on a normally low day, compounded by how the 4th of July holiday fell. The following chart, which shows the average number of passengers each month, illustrates that we’re not back quite yet and have a way to go to reach 2019 levels.

not back quite yet

Nonetheless, we’ve come a long way on the road back, and achieving 80% of 2019 levels on average, with a continuously rising trend, would indicate a back to a normal situation by September. 

But several constraints could hold growth down, as airlines struggle to bring aircraft back and find pilots to fly them.  Nonetheless, the pent-up demand for leisure travel in the US market has traffic growing rapidly and will be soon taxing airline capacity limitations as the return to normality continues.

Internationally, with border restrictions, continuing closures, and quarantine requirements, traffic will be slower to recover.  Business travel is just beginning to come back, as offices are re-opening in July in many areas.  We expect, once business travel returns and the surge of leisure traffic continues, that airline demand in  2022 will turn out to be higher than in 2019.  The key will be how quickly airlines can increase supply to match the forthcoming demand.

The Bottom Line

While we’re not back quite yet, the trends are positive and moving in the right direction.  But recoveries from major economic displacements take time, supply chains need to rebuild, and re-training pilots and returning aircraft into service cannot happen overnight.  Throw in countries that are slow to reopen borders, like Canada, the full recovery won’t arrive until the end of the year or early next year.  The good news is that traffic is back to 80% and growing.  The last 20% however, may be more difficult to quickly achieve until supply constraints are solved and borders reopen.

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