After a busy Labor Day weekend, airlines expect travel to slump

Marcus Costales
September 8, 2020
After a busy Labor Day weekend, airlines expect travel to slump

By Chris Isidore, CNN Business
September 8, 2020

New York (CNN Business)Labor Day weekend was the busiest period for US air travel in nearly six months, as more than 900,000 people went through TSA screening on both Friday and Monday for the first time since March.

But airlines are signaling they believe this won't be repeated any time soon, as summer leisure travel comes to an end while business travel is expected to remain slow to return.

The number of travelers screened by TSA over the five-day period from Thursday to Monday was 39% of the number of the total of those screened during the same period a year ago.

While far from its pre-pandemic levels, this weekend's Labor Day traffic was still far higher than levels recorded earlier this spring and summer.

Leisure travel fed this modest rebound. Business travel is down more than 95% compared with a year ago, according to analysis from Helane Becker, airline analyst for Cowen. And airlines are cutting back on their fall schedule relative to what they flew this summer.

For example, United Airlines (UAL) said it expects to fly 34% of its full schedule in September compared with a year earlier. In August it flew about 48% of its year-earlier schedule. And given that airlines always cut back their schedules after Labor Day, the cut in the September schedule is even deeper than it appears.

"The fall is normally a seasonally weak period, anyway. And this year people have gotten the vacation they had to have," said Phil Baggaley, chief airline credit analyst for Standard & Poor's. He said that early bookings suggested there would be a stronger summer travel season, but a subsequent rise in Covid-19 cases, as well as quarantine and travel restrictions imposed by some states on travelers from hot spots, slowed the recovery.

"The recovery in air travel stalled out in July," he said. "What happens in fall and winter remains to be seen."

Airlines desperately need people to fly. That's why the top 3 US carriers are dumping change feesThe airlines have made clear they're not expecting strong demand through the end of the year. American Airlines (AAL) said it will fly less than 50% of its year-ago schedule in the fourth quarter.

"Historically in this airline, about 40% of our revenues come off of business. And it's pretty unreasonable at this point to think that we'll get anywhere close to that," Vasu Raja, the senior vice president of network strategy at American told analysts in July.

SOURCE: Chris Isidore
VIA: edition.cnn.com

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