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Travel Boom Continues — After yesterday’s piece on strong dollar economics, you already know that European travel has gotten a lot cheaper if your bank account is in greenbacks and not euros. This is even more incentive for Americans to buy that once-in-a-lifetime trip that they’ve been waiting two years to book.
Airlines of late have struggled. It’s been all over the news. Flight delays, cancellations, poor customer service. Fortunately, the mask mandate has been gone for a few months now. Otherwise, we would have fist fights with flight attendants to add to that list.
The airlines are spread thin, including the major US carriers Delta, American, and United. Staffing shortages have compounded routine operating challenges like bad weather and scheduling challenges, putting the airlines squarely in the court of public opinion as well as the crosshairs of the Department of Transportation.
As recently as last month, Mayor Pete compelled airline CEOs to meet and discuss operational issues. He urged airlines to ‘be sure’ they can meet the schedules they have promised to consumers. Whatever that means.
Delta Airlines was the first of the major travel brands to report earnings from this most recent quarter. Even after being publicly chastised by Mayor Pete and every news program in America, Delta has experienced an increase in demand for both business and leisure travel.
Business travel is making a comeback. It turns out that reading slides to your team from another time zone with your cameras off and your team on mute, except for the guy who is a loud breather, isn’t a great way to collaborate sometimes. Delta saw a 25% surge from the first quarter of this year in business travel, up to 80% of pre-C19 levels.
Leisure travel is selling like gangbusters. Revenue for domestic travel is up 3% compared to 2019 levels even though Delta’s capacity is a mere 85% compared to 3 years ago.
These numbers sound promising, but they don’t paint the whole picture. I won’t read too much into them until I hear from the other major airlines as well as the Hiltons and Marriotts of the world.
I hear a lot of anecdotes about travel and pent-up demand for it; hopefully, they turn out to be true.
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