US Airline Booking Trends during COVID-19

LAXdude1023 · Tue May 10, 2022 3:46 pm

PSU.DTW.SCE wrote:
I think the revenue management tactics that the airlines deployed in 2021 helped get leisure travel back to pre-pandemic booking/volume levels, particularly since they didn't have the business/corporate demand.

As has been pointed out with business / corporate travel coming back, along with less available capacity than pre-pandemic, and passing along higher costs - you can see higher fares across the board for 2022. More traditional revenue management patterns are being see much higher close-in fares, (less than 21,14,7 days), less of the cheap inventory buckets, etc.

Anecdotally, I work as a Commercial Aviation Analyst for a Corporate Travel firm. Right now, we cant hire fast enough. Our numbers are about 85% of 2019 levels and saying our staff is overworked would be a severe understatement.

The only area where Corporate Travel is still in the dumpster is Asia. Western Europe is about 70% of 2019 and Latin America is about 110% of 2019. Domestic is close to 100%.

I cant speak for other companies or other views, but were going gangbusters over here.

leader1 · Tue May 10, 2022 5:14 pm

LAXdude1023 wrote:
PSU.DTW.SCE wrote:
I think the revenue management tactics that the airlines deployed in 2021 helped get leisure travel back to pre-pandemic booking/volume levels, particularly since they didn't have the business/corporate demand.

As has been pointed out with business / corporate travel coming back, along with less available capacity than pre-pandemic, and passing along higher costs - you can see higher fares across the board for 2022. More traditional revenue management patterns are being see much higher close-in fares, (less than 21,14,7 days), less of the cheap inventory buckets, etc.

Anecdotally, I work as a Commercial Aviation Analyst for a Corporate Travel firm. Right now, we cant hire fast enough. Our numbers are about 85% of 2019 levels and saying our staff is overworked would be a severe understatement.

The only area where Corporate Travel is still in the dumpster is Asia. Western Europe is about 70% of 2019 and Latin America is about 110% of 2019. Domestic is close to 100%.

I cant speak for other companies or other views, but were going gangbusters over here.

Just curious, but how is business travel like regionally? I presume regions like the Northeast and West Coast are struggling more than the Midwest or South. Anecdotally, my clients in the Northeast and West Coast are more hesitant to travel compared those in, say, Texas. Personally, I haven't had a business trip since right before the pandemic.

And what's business travel like to Canada? Considering how much tougher restrictions are up there, I presume it's way down.

LAXdude1023 · Tue May 10, 2022 5:28 pm

leader1 wrote:
LAXdude1023 wrote:
PSU.DTW.SCE wrote:
I think the revenue management tactics that the airlines deployed in 2021 helped get leisure travel back to pre-pandemic booking/volume levels, particularly since they didn't have the business/corporate demand.

As has been pointed out with business / corporate travel coming back, along with less available capacity than pre-pandemic, and passing along higher costs - you can see higher fares across the board for 2022. More traditional revenue management patterns are being see much higher close-in fares, (less than 21,14,7 days), less of the cheap inventory buckets, etc.

Anecdotally, I work as a Commercial Aviation Analyst for a Corporate Travel firm. Right now, we cant hire fast enough. Our numbers are about 85% of 2019 levels and saying our staff is overworked would be a severe understatement.

The only area where Corporate Travel is still in the dumpster is Asia. Western Europe is about 70% of 2019 and Latin America is about 110% of 2019. Domestic is close to 100%.

I cant speak for other companies or other views, but were going gangbusters over here.

Just curious, but how is business travel like regionally? I presume regions like the Northeast and West Coast are struggling more than the Midwest or South. Anecdotally, my clients in the Northeast and West Coast are more hesitant to travel compared those in, say, Texas. Personally, I haven't had a business trip since right before the pandemic.

And what's business travel like to Canada? Considering how much tougher restrictions are up there, I presume it's way down.

In our observation the one that is still really down is Bay Area traffic. Southern California has picked up quite a bit.

Texas, the Rocky Mountain states, and the Southeast have been back in full swing for quite some time. The Midwest wasnt far behind in catching up. The Northeast has been patchy. Surprisingly Boston, is gangbusters even compared to 2019 (for us anyway) but NYC is still lagging a small bit. I would imagine a good deal of Boston has to do with BioTech that is so strong there.

As far as Canada is concerned, Alberta is leading the charge on recovery for us. The other provinces were lagging somewhat.

I have to stress that were only one company so I cant superimpose our results to everyone else, but Id be surprised if it was that much different elsewhere.

Midwestindy · Thu May 12, 2022 3:54 pm

Interesting headline: "U.S. airline bookings dropped 17% in April as flights got even more expensive"

"The new data suggests consumers are starting to back off buying tickets."

https://www.cnbc.com/2022/05/12/us-airl ... icier.html

Not sure I 100% agree with the conclusions being drawn here:

1) Overall tickets were still 5% higher than April 2019

2) March statistically is the largest month for air travel bookings for the year, so a decline MoM is not surprising

3) Airlines have been vocal about being more pro-active in safe guarding summer availability, in order to save availability for last minute buyers. In other words more safe-guarding of capacity = less tickets being sold far out

4) Most obvious is the decrease in capacity, simply put there are fewer flights available than there were previously, airlines aggressively cut summer due to crew shortages and increased the window where they have made cuts. A number of carriers have even updated their schedules through September. Consumer can only buy tickets if the flights are available, and many routes have been taken out.

With that being said, jet fuel prices need to come down. Ticket prices according to Adobe were 27% higher in April vs. April 2019, and 8% higher than in March. While potentially sustainable for the summer travel period it likely is unsustainable once late August/September hits, unless more significant capacity reduction are put in place.

joeblow10 · Thu May 12, 2022 4:06 pm

Midwestindy wrote:
Interesting headline: "U.S. airline bookings dropped 17% in April as flights got even more expensive"

"The new data suggests consumers are starting to back off buying tickets."

https://www.cnbc.com/2022/05/12/us-airl ... icier.html

Not sure I 100% agree with the conclusions being drawn here:

1) Overall tickets were still 5% higher than April 2019

2) March statistically is the largest month for air travel bookings for the year, so a decline MoM is not surprising

3) Airlines have been vocal about being more pro-active in safe guarding summer availability, in order to save availability for last minute buyers. In other words more safe-guarding of capacity = less tickets being sold far out

4) Most obvious is the decrease in capacity, simply put there are fewer flights available than there were previously, airlines aggressively cut summer due to crew shortages and increased the window where they have made cuts. A number of carriers have even updated their schedules through September. Consumer can only buy tickets if the flights are available, and many routes have been taken out.

With that being said, jet fuel prices need to come down. Ticket prices according to Adobe were 27% higher in April vs. April 2019, and 8% higher than in March. While potentially sustainable for the summer travel period it likely is unsustainable once late August/September hits, unless more significant capacity reduction are put in place.

Don’t forget the impact of inflation in other categories of goods/services as well. There was some survey out the other day showing the average consumer is highly likely to significantly reduce certain “fun” expenditures such as dining out in the coming months. That’s not great news for the airlines either.

I agree - the summer should be as close to profitability (if not actually profitable) the airlines have been since COVID began, simply due to the overwhelming demand for travel this summer, even if some is cut back due to price increases. But the economic outlook beyond that is going to be tough.

MohawkWeekend · Thu May 12, 2022 4:11 pm

Several industries are starting see people making cutbacks in discretionary purchases. (e.g. Netflix) Daughter and future son-in-law were hoping to go to Hawaii for their honeymoon in July but the cost of the flight made them pick the USVI instead.

It's not just fuel prices - hasn't airline CASM (ex-fuel) gone up 15 to 20% YOY too?

Midwestindy · Thu May 12, 2022 10:53 pm

MohawkWeekend wrote:
Several industries are starting see people making cutbacks in discretionary purchases. (e.g. Netflix) Daughter and future son-in-law were hoping to go to Hawaii for their honeymoon in July but the cost of the flight made them pick the USVI instead.

It's not just fuel prices - hasn't airline CASM (ex-fuel) gone up 15 to 20% YOY too?

CASM ex-fuel was flat or down for most carriers yoy vs. Q1 2021. Vs. 2019 is different.

For Q1 and probably into some of Q2, from my understanding ex-fuel CASM (for AAL and DAL at least) is supposed to be in the mid-single digits to less than 10% range in terms of increase vs. 2019 in the 2nd half of 2022.

Keep in mind:

a) CASM is a function of capacity flown, and airlines haven't been able to maximize the use of these aircraft, therefore that's partially why CASM is at elevated levels

b) Comparing to 2019 you also have to factor almost 3 years worth of inflation, so a 10% increase in 3 years isn't that extreme.

MohawkWeekend · Thu May 12, 2022 11:14 pm

As you guys know, I'm not an accountant but this was from United's SEC filing in April of this year -

"Adjusted cost per available seat mile ("CASM-ex"). The Company expects CASM-ex (a non-GAAP financial measure defined as cost or operating expense per available seat mile ("CASM") excluding fuel, profit sharing, third-party business expense and special charges (credits)) to increase approximately 16% in the second quarter of 2022 as compared to the same period in 2019.

Delta reported the following - " Compared to the March quarter of 2019, non-fuel unit costs (CASM-Ex) were 15 percent higher on 17 percent less capacity."

Midwestindy · Fri May 13, 2022 1:02 am

MohawkWeekend wrote:
As you guys know, I'm not an accountant but this was from United's SEC filing in April of this year -

"Adjusted cost per available seat mile ("CASM-ex"). The Company expects CASM-ex (a non-GAAP financial measure defined as cost or operating expense per available seat mile ("CASM") excluding fuel, profit sharing, third-party business expense and special charges (credits)) to increase approximately 16% in the second quarter of 2022 as compared to the same period in 2019.

Delta reported the following - " Compared to the March quarter of 2019, non-fuel unit costs (CASM-Ex) were 15 percent higher on 17 percent less capacity."

Yeah that’s what I was saying, for Q1 and some of Q2 CASM-ex was in that 15% range vs. 2019. You said yoy which would be 2021 not 2019, CASM-ex didn’t increase 15% vs 2021.

DL guided a “mid-single digit” increase in CASM-ex for the 2nd half of 2022 vs. 2019. Regardless, Q1 and partially Q2, are not the norm for how CASM-ex will be for the rest of the year for the reasons I outlined above.

PSU.DTW.SCE · Fri May 13, 2022 3:54 am

Yep..... its interesting to see how yield management practices are apparent in airfares for flights over peak summer.

Like many have noticed antidotally, its a combination of higher costs - labor / fuel, with reduced capacity, and the near term where there is less capacity than pre-pandemic.

More traditional yield management tactics have been deployed; limiting the availability of cheaper fare buckets for advanced purchases but increasingly limiting into more expensive / keeping inventory available for closer-in booking at higher yields.

joeblow10 · Fri May 13, 2022 12:36 pm

PSU.DTW.SCE wrote:
Yep..... its interesting to see how yield management practices are apparent in airfares for flights over peak summer.

Like many have noticed antidotally, its a combination of higher costs - labor / fuel, with reduced capacity, and the near term where there is less capacity than pre-pandemic.

More traditional yield management tactics have been deployed; limiting the availability of cheaper fare buckets for advanced purchases but increasingly limiting into more expensive / keeping inventory available for closer-in booking at higher yields.

I did notice (anecdotally) that my flights for Memorial Day were being held at an extremely high price initially, and in the past couple of days, have decreased in price over 40%. And it seems to be across the board on the route I am looking at.

There are risks to holding out so much inventory if the demand doesn’t pan out like you plan it to. Especially if your goal was to hold out for last minute corporate travelers who were willing to pay more than others.

Midwestindy · Fri May 13, 2022 12:46 pm

joeblow10 wrote:
Midwestindy wrote:
Interesting headline: "U.S. airline bookings dropped 17% in April as flights got even more expensive"

"The new data suggests consumers are starting to back off buying tickets."

https://www.cnbc.com/2022/05/12/us-airl ... icier.html

Not sure I 100% agree with the conclusions being drawn here:

1) Overall tickets were still 5% higher than April 2019

2) March statistically is the largest month for air travel bookings for the year, so a decline MoM is not surprising

3) Airlines have been vocal about being more pro-active in safe guarding summer availability, in order to save availability for last minute buyers. In other words more safe-guarding of capacity = less tickets being sold far out

4) Most obvious is the decrease in capacity, simply put there are fewer flights available than there were previously, airlines aggressively cut summer due to crew shortages and increased the window where they have made cuts. A number of carriers have even updated their schedules through September. Consumer can only buy tickets if the flights are available, and many routes have been taken out.

With that being said, jet fuel prices need to come down. Ticket prices according to Adobe were 27% higher in April vs. April 2019, and 8% higher than in March. While potentially sustainable for the summer travel period it likely is unsustainable once late August/September hits, unless more significant capacity reduction are put in place.

Don’t forget the impact of inflation in other categories of goods/services as well. There was some survey out the other day showing the average consumer is highly likely to significantly reduce certain “fun” expenditures such as dining out in the coming months. That’s not great news for the airlines either.

I agree - the summer should be as close to profitability (if not actually profitable) the airlines have been since COVID began, simply due to the overwhelming demand for travel this summer, even if some is cut back due to price increases. But the economic outlook beyond that is going to be tough.

IIRC only NK and B6 guided losses for Q2 (not sure on HA), every other carrier I believe projected profitability in Q2, a couple might even be projecting fairly close to 2019 margins. Base case seems to be basically every major US airline being profitable in Q3.

With regards to cut backs in household expenditures, the current rise in ticket prices is not at all sustainable from a demand perspective. I doubt fuel will stay elevated at these levels for the rest of the year, which should provide some easing of pressure on the airlines.

But it frankly wouldn't necessarily surprise me if there was some cutting back of travel expenditures now or in the near future. Many people planned and budgeted trips early this year or late last year, and the cost of traveling has wildly increased since then. Leisure travel is still very strong though, just not as strong as it would be without these higher fares and lower capacity.

MIflyer12 · Fri May 13, 2022 1:45 pm

Midwestindy wrote:
IIRC only NK and B6 guided losses for Q2 (not sure on HA), every other carrier I believe projected profitability in Q2...

AA was pretty ambivalent in the 8-K of 4/21/22:

Pre-tax margin excluding net special items -3% to + 5%

AA (and B6) were already close to 2019 capacity so they have less room for leveraging costs, meaning their CASM-ex (up 8-10 points for AA 2Q22 projection; B6 up 14% 1Q22) is going to stay up.

Midwestindy · Fri May 13, 2022 3:54 pm

MIflyer12 wrote:
Midwestindy wrote:
IIRC only NK and B6 guided losses for Q2 (not sure on HA), every other carrier I believe projected profitability in Q2...

AA was pretty ambivalent in the 8-K of 4/21/22:

Pre-tax margin excluding net special items -3% to + 5%

AA (and B6) were already close to 2019 capacity so they have less room for leveraging costs, meaning their CASM-ex (up 8-10 points for AA 2Q22 projection; B6 up 14% 1Q22) is going to stay up.

For AA, Up 8-10 points vs. 2019 isn't that big of an increase and is lower than some of the other legacies. Again, that's only a 3% yearly increase from 2019-2022, in-line with what was happening pre-covid.

B6 is a whole different thing, because while they may be up or close to 2019 capacity, they drastically reduced their schedules from what they were supposed to be at when they built out their cost models. In other words they aren't maximizing the use of their aircraft. I believe they said in the earnings call, without the disruptions in April they would be expecting a sub 10% increase in CASM-ex.

RicFlyer · Sun May 15, 2022 8:45 pm

I have been tracking TSA screening numbers since @Midwestindy started the spread sheet. This past week May 8 - May 14 is the first week that the seven day total has surpassed 15 million. For the week the total was 15,065,983. Things continue to move forward!

LAXintl · Mon May 16, 2022 6:28 pm

NY Times has a story about changes to business travel and has some interesting points.

○ Travel continues to return unevenly
○ Business trips by individuals still not returning quickly
○ Employers continue to set limits on travel, while empty offices also limit travel potential.
○ Travel volumes driven largely by small and medium companies who still seek to meet face to face
○ A substantial portion of employees of large corporations will not travel permanently again, as the companies focus on productivity, cost savings and sustainability.
○ With the increase in remote work, a "business trip" now likely means an occasional internal meeting at a company office
○ Las Vegas tourism authority says they have more trade events scheduled this year than in 2019, but events are smaller with total attendance only 60-65% of 2019 levels.
○ NYC tourism forecast business travel to the city won't reach 2019 levels until 2025.
○ Hotel industry says markets hardest hit by biz travel decline - SF, NYC, and DC

https://www.nytimes.com/2022/05/15/busi ... ravel.html

Midwestindy · Tue May 17, 2022 12:49 pm

Pieces from UA today and yesterday evening:

-"Don’t read too much into leisure travel bookings, revenue mgmt systems are tightening up, so that’s what's causing any slowing of demand"
-"Biggest concern for summer is selling out of capacity"
-"Expecting a large step up in business travel in fall, as summer is relative slow season for corporate travel"
BoA transport conference

-UA is seeing more business travel involving internal meetings than it did pre-covid
https://twitter.com/SquawkCNBC/status/1 ... uOaczURLRQ

-Huge jump in expected TRASM, fuel increases still keeping margin flat

https://ir.united.com/static-files/84b6 ... 14c0d331b6

miami123 · Tue May 17, 2022 1:40 pm

I definitely see the pull back in travel in large corporations, non profits and education. Even for events that should be in person but those at the top seem to think Zoom is no different than being there.

I also have to wonder with inflation what that's going to do some leisure travel in the future. True, the upper middle class will continue to travel but the middle and lower middle class. They've got to be eaten alive by inflation. Even someone like myself-single making six figures feels it. $42 the other day in Alexandria, VA for a rather simple lunch. Not to mention what's happened with airfares, hotels and rental cars.

tphuang · Tue May 17, 2022 3:21 pm

Midwestindy wrote:
Pieces from UA today and yesterday evening:

-"Don’t read too much into leisure travel bookings, revenue mgmt systems are tightening up, so that’s what's causing any slowing of demand"
-"Biggest concern for summer is selling out of capacity"
-"Expecting a large step up in business travel in fall, as summer is relative slow season for corporate travel"
BoA transport conference

-UA is seeing more business travel involving internal meetings than it did pre-covid
https://twitter.com/SquawkCNBC/status/1 ... uOaczURLRQ

-Huge jump in expected TRASM, fuel increases still keeping margin flat

https://ir.united.com/static-files/84b6 ... 14c0d331b6

Ouch, that fuel price. the airfares are definitely reflective of that.

UPlog · Tue May 17, 2022 6:31 pm

I suspect there might be some back sliding on corporate travel again.

For example Apple today froze its plans for a return to offices and reimposed mask mandate for employees in common/public spaces as COVID case counts rise.

Of course there are ton of companies still in remote/home work mode in places especially here on the West Coast with minimal if any travel, and this rise in cases pushes their return horizon out even further.

LAXdude1023 · Tue May 17, 2022 6:37 pm

UPlog wrote:
I suspect there might be some back sliding on corporate travel again.

For example Apple today froze its plans for a return to offices and reimposed mask mandate for employees in common/public spaces as COVID case counts rise.

Of course there are ton of companies still in remote/home work mode in places especially here on the West Coast with minimal if any travel, and this rise in cases pushes their return horizon out even further.

All I know if what my collogues and I are seeing in Corporate Travel Companies.

We are working 12 hour days, cant hire fast enough, are back in profit, and are looking at expansion.

So if there is any dip in it, you would have fooled us.

Sidebar: I cant help but notice that literally no one in this thread has changed their minds about anything in the last two years. The doom and gloom posters in regards to Corporate Travel in December of 2020 are the same ones here now despite ample evidence to the contrary.

LAXintl · Tue May 17, 2022 7:05 pm

LAXdude1023 wrote:
All I know if what my collogues and I are seeing in Corporate Travel Companies.

We are working 12 hour days, cant hire fast enough, are back in profit, and are looking at expansion.

So if there is any dip in it, you would have fooled us.

Sidebar: I cant help but notice that literally no one in this thread has changed their minds about anything in the last two years. The doom and gloom posters in regards to Corporate Travel in December of 2020 are the same ones here now despite ample evidence to the contrary.

We live in totally different worlds.

Have not flown for business since Feb 2020. Virtually none of my clients are back in the office, so no point to travel anywhere. By chance, one came out to visit me here in LA, but otherwise it's been 100% virtual and business has not missed a beat.
Have gone from 200,000 annual miles for more than a decade down to zero.

Same goes for wife, who is senior execituve for a global consumer goods company also remains WFH mode with zero business travel. This conglomerate which prepandemic was already pretty progressive with hybrid work models gave up a ton of U.S. office leases and those remaining are largely for drop-in use, with minimal staff in the office consistently. The company says productivity has not slipped, and employee happiness is up.

So yes some folks are definitely traveling, but others are not. So in my world, there is no "recovery". To me this is the new normal, which I quite enjoy honestly.

SEAorPWM · Tue May 17, 2022 7:15 pm

UPlog wrote:
I suspect there might be some back sliding on corporate travel again.

For example Apple today froze its plans for a return to offices and reimposed mask mandate for employees in common/public spaces as COVID case counts rise.

Of course there are ton of companies still in remote/home work mode in places especially here on the West Coast with minimal if any travel, and this rise in cases pushes their return horizon out even further.

At this point they might as well sell the Cupertino campus - these peaks and troughs are going to continue like the common flu strains we face yearly.

With all of their manufacturing overseas, I do wonder how well their virtual coordination will work out in the long run, especially when a new device is introduced.

Jshank83 · Tue May 17, 2022 7:30 pm

I think it just is different person to person, company to company.
My company is back to travel. It might not be back to pre-covid levels yet, but I don't think it is far off. There no longer are covid restrictions to travel.
My wife has traveled more for work in the last 3 months than she did in any year pre-covid. But it is a lot more one or two day trips instead of weeklong trips.

But I don't doubt some people who traveled a lot pre covid for work are traveling none or much less still.

SEAorPWM · Tue May 17, 2022 7:34 pm

NYC-based media has already restarted the fear engine:

https://time.com/charter/6177304/busine ... -decision/

LAXdude1023 · Tue May 17, 2022 8:02 pm

LAXintl wrote:
LAXdude1023 wrote:
All I know if what my collogues and I are seeing in Corporate Travel Companies.

We are working 12 hour days, cant hire fast enough, are back in profit, and are looking at expansion.

So if there is any dip in it, you would have fooled us.

Sidebar: I cant help but notice that literally no one in this thread has changed their minds about anything in the last two years. The doom and gloom posters in regards to Corporate Travel in December of 2020 are the same ones here now despite ample evidence to the contrary.

We live in totally different worlds.

Have not flown for business since Feb 2020. Virtually none of my clients are back in the office, so no point to travel anywhere. By chance, one came out to visit me here in LA, but otherwise it's been 100% virtual and business has not missed a beat.
Have gone from 200,000 annual miles for more than a decade down to zero.

Same goes for wife, who is senior execituve for a global consumer goods company also remains WFH mode with zero business travel. This conglomerate which prepandemic was already pretty progressive with hybrid work models gave up a ton of U.S. office leases and those remaining are largely for drop-in use, with minimal staff in the office consistently. The company says productivity has not slipped, and employee happiness is up.

So yes some folks are definitely traveling, but others are not. So in my world, there is no "recovery". To me this is the new normal, which I quite enjoy honestly.

Perhaps we have to look at it from outside our worlds then.

Honestly, all the data I need that people are traveling for work is this:

https://www.tsa.gov/coronavirus/passenger-throughput

This said, does that mean that all of this is corporate or that perhaps a bigger chunk of it is leisure vs. 2019? Of course not, but numbers would not be remotely that high if Corporate Travel wasnt back in a big way. Were over 90% of 2019 levels many days.

Im a corporate travel analyst for a TMC and I absolutely get that there are nuances to this. In our business there are some markets like the Bay Area, LA, and DC that are still quite low relative to 2019, but we have other markets that are more than making up for it. Even NYC, Boston, and Chicago are going gangbusters. Texas, Florida and the Southeast are higher than 2019 levels for us. I stress these are numbers from out business so Im not trying to say its this way everywhere, but in talking with colleagues at other TMCs the pattern does seem the same.

I think it has to also be pointed out that politics plays a role. The New York Times did a really great survey of feelings towards the pandemic, acceptance of restrictions, and behavior modifications. The results were very shocking IMO. What they found was that people who identified as Liberal, Moderate, Conservative, and Very Conservative held the exact same views about the situation. That is to say they mostly opposed restrictions and wanted to find a way to move past it. It was only the people who identified as Very Liberal that wanted to keep restrictions in place. The most rich source of people who identify as "Very Liberal" is California and specifically the Bay Area. So I can definitely see where things in California may seem different.

In the end we can only look at data.

LAXintl · Tue May 17, 2022 9:52 pm

SEAorPWM wrote:
At this point they might as well sell the Cupertino campus - these peaks and troughs are going to continue like the common flu strains we face yearly.

With all of their manufacturing overseas, I do wonder how well their virtual coordination will work out in the long run, especially when a new device is introduced.

Apple buying 50-seats on United SFO-PVG will likely never be replicated.

This was covered recently in an analyst paper about Apple, and what they have done through the pandemic is basically expanded offshore engineering, design, QA and support functions. For instance with China specifically, the report stated that China based Apple employees have been given far larger decision making roles, with less reliance on U.S. team members having to visit.
Instead of running much of the stuff from the Cupertino mothership, things have been decentralized with local teams having increased autonomy in managing tasks.

UPlog · Tue May 17, 2022 10:53 pm

Business travel certainly seems to differ by sector and geography.

While I live in Arizona, I am based in California and in speaking with many coworkers in CA, it seems a huge portion do have family members that have shifted to remote work models, or only go in one or two days a week. This has resulted in the adoption and reliance on technology and reduced the need for in-personal events and travel it may involve.

Probably be an interesting thing to watch in the years to come to see if California which ends up leading the nation when it comes to many things, ends up setting the trend or model for future white collar work.

But in the mean time, the airline industry probably needs to adjust, as there clearly is a percentage or decent slice of the pie which no longer relies on commercial aviation the way it did prior to conducting its business.

frmrCapCadet · Wed May 18, 2022 1:22 pm

Most on this site are just interested in the data. We have our suspicions as to interpretation, but they remain that: suspicions. To all those credible data suppliers - thank you!

PSU.DTW.SCE · Wed May 18, 2022 1:41 pm

I am curious though that at this point even comparing to 2019 is not really a new barometer of the future.

- We have reduced available capacity - primarily driven by staffing
- Thus even with less demand in certain market/sectors - there is still high demand against less capacity
- Input prices - mainly fuel & labor are significantly higher than in 2019
- Fares are going to be higher due to a combination of higher costs and demand vs. availability capacity - revenue management

So while we may say we are at X% of passengers vs. 2018, or Y% of revenue vs. 2019 or Z% of yield vs 2019; we are in a much different operating environment versus that time

miami123 · Wed May 18, 2022 2:03 pm

UPlog wrote:
I suspect there might be some back sliding on corporate travel again.

For example Apple today froze its plans for a return to offices and reimposed mask mandate for employees in common/public spaces as COVID case counts rise.

Of course there are ton of companies still in remote/home work mode in places especially here on the West Coast with minimal if any travel, and this rise in cases pushes their return horizon out even further.

You can already see the return of COVID coming. Putting aside personal feelings, and while restrictions might not come back like they did with previous "surges" NO company is going to tell people they must travel if the CDC is on every network decrying the "next wave."

I work in software deployment and travel I find is very industry specific. We work with a lot of colleges and Universities and every damn one of them seems to think that it's still June 2020. Ditto non profits. While other industries at least for now are getting back to normal. One caveat is the desire for people to want to continue to WFH for personal reasons. And companies seem to be going along. I work with a couple of airports and their non operational professional staff are still WFH.

MohawkWeekend · Wed May 18, 2022 3:13 pm

US airlines will not be immune from a slowing economy. Only two rate hikes so far. See Target and Walmart earnings and stock price reactions. So it's not just high flying tech companies getting hit.

Midwestindy · Wed May 18, 2022 3:51 pm

AMEX Global Business Travel raised its revenue guidance during their earnings yesterday, as a result of faster than anticipated return in corporate travel:

https://s28.q4cdn.com/623187931/files/d ... vFINAL.pdf

Midwestindy · Thu May 19, 2022 1:35 pm

Looking at Mastercard data, looks like the data numbers are inflated vs. actual.

This data will lean towards Small-Medium companies, who don't have managed travel accounts and purchase tickets using company cards. As airlines have said, the SME segment of business travel is well ahead of large corporations. Hence why you see the numbers for "business travel" so high:

Still think it is useful for trend purposes:

https://www.mastercardservices.com/en/r ... ons-report

Also keeping an eye on oil, which will be important after this summer wave of travel. Gulf coast down 25% from peak last month:

https://ycharts.com/indicators/gulf_coa ... spot_price
https://www.airlines.org/dataset/argus- ... uel-index/

Midwestindy · Mon May 23, 2022 10:50 pm

We'll get more commentary on the booking environment later this week. AA is presenting at the Wolfe Research Transport conference.

https://www.airlines.org/dataset/impact ... -updates/#

Midwestindy wrote:
Also keeping an eye on oil, which will be important after this summer wave of travel. Gulf coast down 25% from peak last month:

https://ycharts.com/indicators/gulf_coa ... spot_price
https://www.airlines.org/dataset/argus- ... uel-index/

https://www.airlines.org/dataset/impact ... -updates/#

Midwestindy · Wed Jun 01, 2022 1:42 pm

"We’re actually in the mid-to-upper 80% range, whereas other hubs are maybe more like that 60% or 70% range. So, corporate demand has come back faster, in Boston than in other Delta hubs."
https://thepointsguy.com/news/delta-air ... expansion/

DL revenue fully recovered vs. 2019

https://s2.q4cdn.com/181345880/files/do ... m-5.31.pdf

Midwestindy · Thu Jun 02, 2022 5:25 pm

https://www.airlines.org/dataset/impact ... -updates/#

Midwestindy · Fri Jun 03, 2022 11:44 am

Demand environment is crazy right now

- AA bumping up pre-tax margin guidance to 4-6%

TRASM now 20-22% higher than 2019!
https://americanairlines.gcs-web.com/st ... b7590e4ea5

- AS expects "double digit" pre-tax margin

Total revenues up 12-14% vs. 2019
https://investor.alaskaair.com/static-f ... 75431318c7

phxa340 · Fri Jun 03, 2022 12:30 pm

I feel like most people have zero clue about the health of the economy. I trust Jamie Dimon over airline guidance any day. Demand is going to crater , inflation is going to soar and the Fed is going on to have to kill demand.

SEAorPWM · Fri Jun 03, 2022 1:07 pm

phxa340 wrote:
I feel like most people have zero clue about the health of the economy. I trust Jamie Dimon over airline guidance any day. Demand is going to crater , inflation is going to soar and the Fed is going on to have to kill demand.

You're probably right with business travel being down, but Dimon and his like can take much of the blame for this inflationary environment (commodity speculation and domestic production restriction, etc...).

At the end of the day, it's all soft-core market manipulation to some degree when these statements are made.

Midwestindy · Fri Jun 03, 2022 1:17 pm

SEAorPWM wrote:
phxa340 wrote:
I feel like most people have zero clue about the health of the economy. I trust Jamie Dimon over airline guidance any day. Demand is going to crater , inflation is going to soar and the Fed is going on to have to kill demand.

You're probably right with business travel being down, but Dimon and his like can take much of the blame for this inflationary environment (commodity speculation and domestic production restriction, etc...).

Fitch (one of the 3 main credit rating agencies) just issued a report yesterday saying they see limited downside risk to airlines in the event of an economic slowdown.

https://www.fitchratings.com/research/c ... 02-06-2022

joeblow10 · Fri Jun 03, 2022 1:26 pm

Midwestindy wrote:
SEAorPWM wrote:
phxa340 wrote:
I feel like most people have zero clue about the health of the economy. I trust Jamie Dimon over airline guidance any day. Demand is going to crater , inflation is going to soar and the Fed is going on to have to kill demand.

You're probably right with business travel being down, but Dimon and his like can take much of the blame for this inflationary environment (commodity speculation and domestic production restriction, etc...).

Fitch (one of the 3 main credit rating agencies) just issued a report yesterday saying they see limited downside risk to airlines in the event of an economic slowdown.

https://www.fitchratings.com/research/c ... 02-06-2022

It’s always funny to listen to agencies like Fitch make a total 180 on these predictions after the recession actually happens and ask “who could have possibly seen this coming?!” Just like we’re currently being told the housing market isn’t actually going to decline that much once it happens.

While there is pent up demand, one of the first expenditures that’s going to be cut when the recession finally does hit is travel - both leisure and corporate. If gas stays as expensive as it is, the airlines are in for a double whammy world of hurt just like the last one… their number one cost at a near all time high and limited revenues as demand declines.

I would say that’s a pretty big downside risk.

Midwestindy · Fri Jun 03, 2022 2:04 pm

joeblow10 wrote:
Midwestindy wrote:
SEAorPWM wrote:

You're probably right with business travel being down, but Dimon and his like can take much of the blame for this inflationary environment (commodity speculation and domestic production restriction, etc...).

Fitch (one of the 3 main credit rating agencies) just issued a report yesterday saying they see limited downside risk to airlines in the event of an economic slowdown.

https://www.fitchratings.com/research/c ... 02-06-2022

It’s always funny to listen to agencies like Fitch make a total 180 on these predictions after the recession actually happens and ask “who could have possibly seen this coming?!” Just like we’re currently being told the housing market isn’t actually going to decline that much once it happens.

While there is pent up demand, one of the first expenditures that’s going to be cut when the recession finally does hit is travel - both leisure and corporate. If gas stays as expensive as it is, the airlines are in for a double whammy world of hurt just like the last one… their number one cost at a near all time high and limited revenues as demand declines.

I would say that’s a pretty big downside risk.

"If gas stays expensive as it is," is quite a big if.

Unless you expect further constraints on oil supply to outpace any global slowdown of economic activity (a big assumption), oil prices can not stay this high under a global recession.

ordbosewr · Fri Jun 03, 2022 2:50 pm

Midwestindy wrote:
joeblow10 wrote:
Midwestindy wrote:

Fitch (one of the 3 main credit rating agencies) just issued a report yesterday saying they see limited downside risk to airlines in the event of an economic slowdown.

https://www.fitchratings.com/research/c ... 02-06-2022

It’s always funny to listen to agencies like Fitch make a total 180 on these predictions after the recession actually happens and ask “who could have possibly seen this coming?!” Just like we’re currently being told the housing market isn’t actually going to decline that much once it happens.

While there is pent up demand, one of the first expenditures that’s going to be cut when the recession finally does hit is travel - both leisure and corporate. If gas stays as expensive as it is, the airlines are in for a double whammy world of hurt just like the last one… their number one cost at a near all time high and limited revenues as demand declines.

I would say that’s a pretty big downside risk.

"If gas stays expensive as it is," is quite a big if.

Unless you expect further constraints on oil supply to outpace any global slowdown of economic activity (a big assumption), oil prices can not stay this high under a global recession.

I am sure we can all point to what we are hearing from the circles we move around in, but what I am hearing is that people are planning to take trips they have booked. Yes, it is going to be more expensive than they originally thought, but those trips will happen. That is being driven by the fact that many missed or altered the plans from summer 2021 and they put off the trip they are now doing. Like some that said no to Europe last year are going this year, no matter the price. The mindset is not being driven by cost but other 'factors'.

I do think what is not as confident is those trips folks are planning now, will increased prices start to make changes to the decisions about where, when or how many. maybe instead of 2 trips folks start saying I am only going to do 1. That will be the big question. or maybe say I didn't travel for 2020 and 2021 so I am doing it no matter what.

Prices are high, but they have not hit that level that demand is being destroyed (generally). I do think that is coming (generally). I think there are some that have already started making those hard decisions, but others not yet.

Side note, my kids have some US government savings bonds (I bonds) that are earning ~9.75% interest. That is highest I think I have ever seen, I mean at one point those where in the 1 or 2 percent range.....

frmrCapCadet · Sun Jun 05, 2022 1:54 pm

New jobs added to the US workforce, almost 400K last month, percent of workforce working(those 25-65, IIRC) approaching all time highs, women, blacks and Hispanics getting back in the workforce, car demand (both used and new) still kind of insane, jobs available still outta sight, long term inflation expectations of those with lots of money - about 3.5, lower than Reagan's goals in the 80s. Big problem, even with outrageous monthly fees nursing home and memory care units are at the edge of bankruptcy, cost in housing increasingly out of control, even in many rural areas, a low grade world war going on, petroleum gone total bonkers with major suppliers under sanctions along with paranoid suppliers looking and the ever expanding electric vehicle growth. Weird economy. And airlines seems to be hurting mostly because they can't staff the planes they have, but as mentioned good profits expected.

Source for all of this is mostly Bloomberg, NYT, and Washington Post. Links provided upon request. Most of it has flooded all major news sources and general observations by most people.

miami123 · Mon Jun 06, 2022 12:56 pm

phxa340 wrote:
I feel like most people have zero clue about the health of the economy. I trust Jamie Dimon over airline guidance any day. Demand is going to crater , inflation is going to soar and the Fed is going on to have to kill demand.

I clearly remember 2007 and well into 2008 when the economy "was strong", the "fundamentals were good", future demand "was solid" and that any issues in the housing market were" temporary and wouldn't be deep." Then suddenly as the summer of 2008 began to come to an end so did all the rosy language. We literally went into the deepest global economic crisis within a matter of weeks. Somehow while the parameters might be a bit different this time the basis storyline will be the same.

If the non Zoom class starts to spend $6+ a gallon on gas they will more than likely take the already booked summer trip (and finance any of the shortfall by credit cards) but after that will be a different story.

LAXintl · Tue Jun 07, 2022 5:00 pm

Comparison of leisure and biz travel ticket sales per consultancy Oliver Wyman

https://www.planestats.com/images/aea1_2022jun.jpeg

Midwestindy · Tue Jun 07, 2022 5:05 pm

"Bookings for foreign travel are approaching prepandemic levels for many destinations as Americans take long-delayed overseas vacations and Covid-19-related travel restrictions around the world ease.

International bookings from the U.S. over the core summer months—June through August—are currently at 97% of 2019 levels

Tickets issued on trips to the Caribbean are higher than in 2019, at 109% of their prepandemic level.

Bookings to South America and Europe are tracking at 95% and 93%, respectively.

"The Asia-Pacific region is a laggard, with China’s still-strict Covid-19 policies restricting traffic and weighing on the entire region’s recovery. Bookings for Asia-bound travel over the summer stands at just 62% of where they were before the pandemic."

https://www.wsj.com/articles/americans- ... 1654613072

LAXintl · Tue Jun 07, 2022 5:16 pm

Per Travelport booking data, the top global destinations for US travelers between Memorial Day and Labor Day holidays are:

1. Cancun, Mexico
2. London, England
3. Punta Cana, Dominican Republic
4. Montego Bay, Jamaica
5. Rome, Italy

Top domestic destintions

1. New York
2. Orlando
3. Seattle
4. Las Vegas
5. Los Angeles

https://www.travelport.com/press-releas ... vel-trends

WidebodyPTV · Tue Jun 07, 2022 5:32 pm

LAXintl wrote:
Per Travelport booking data, the top global destinations for US travelers between Memorial Day and Labor Day holidays are:

1. Cancun, Mexico
2. London, England
3. Punta Cana, Dominican Republic
4. Montego Bay, Jamaica
5. Rome, Italy

Top domestic destintions

1. New York
2. Orlando
3. Seattle
4. Las Vegas
5. Los Angeles

https://www.travelport.com/press-releas ... vel-trends

Seattle over Las Vegas? I’m not buying it. Maybe as a gateway for cruises to Alaska, but not as a destination.

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