Airlines Bracing for the Good, Bad and Ugly of Holiday Travel

Airlines Bracing for the Good, Bad and Ugly of Holiday Travel


Troy Warren for CNT #Travel


Airlines can’t stand storms of any kind. High winds, rain, snow, ice – it wreaks havoc on flight schedules.

But despite great optimism that air travel over the holidays could be as brisk as ever, there is a looming perfect storm that could disrupt the lucrative six-week period between Thanksgiving and New Year’s.

“It’s going to be messy, to say the least,” Helane Becker, senior research analyst at Cowen and Co. and one of the most respected airline analysts in the world, said on CNBC’s “Squawk on the Street” program.

Airlines are more than optimistic about the number of people who plan to fly during the holidays. Strong early bookings indicate as much, as does consumer sentiment, especially after the pandemic impacted travel during the 2020 holidays.

“Our bookings for the holidays are basically following the curve that they followed in 2019, which gives us a lot of assurance that there’s demand there,” Southwest Airlines’ incoming CEO Robert Jordan told Yahoo Finance. “And you’ll see load factors that are pretty typical. … We’re seeing our holiday trends right in line with 2019, which is, I think, very encouraging.”

But Becker cited what she called “a confluence of issues” that could make holiday travel difficult.

For starters, there are more travelers and fewer airline employees. Airlines have been somewhat caught off-guard by the amount of travel with the debut of the vaccine in January of this year and dwindling COVID-19 case numbers. They furloughed or bought out thousands of employees and now find themselves short-staffed as they attempt to bring them back.

“We went from very little travel to travel just roaring back in the summer. And I’m not sure any airline was prepared for that,” Jordan admitted. “And we’ve had staffing challenges. We’ve had some challenges with our network because it’s just not the same network we had pre-pandemic. It’s thinner in that a lot of the routes just don’t have the frequencies that they had before.”

Weather can be an issue. Airlines have struggled with the staffing issue but also the weather. Southwest has had two extended periods of cancellations and delays within three months this year and, just days ago, American was forced to cancel or delay more than 2,000 flights in part because of storms around its main hub at Dallas-Fort Worth International Airport.

“If we have any kind of weather over the holidays, and usually we get at least one snowstorm between Christmas and New Year’s or whatever, people are going to have to be patient,” Becker said.

Rising fuel prices will drive up prices. Every 5-cent increase in fuel prices drives up expenses by about $40 million, Delta Air Lines CEO Ed Bastian said recently. And the cost will be passed along to consumers.

“There’s nothing we can do to keep fuel prices down,” he said. “What we need to work on is our ability to include that in our pricing.”

Airlines have also cut back on their respective routes, and fewer options for travelers means higher fares and more packed planes.

And, of course, there is always the threat of unruly passengers and violent outbursts – which in some cases have led to physical confrontations.

“It’s going to be a tough holiday season,” Becker said. “Everybody wants to get out and travel.”

In Other NEWS


By Troy Warren

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts