U.S. airline executives are the most optimistic since the start of the coronavirus pandemic thanks to an ongoing travel rebound fueled by vaccination rates, trends in COVID cases and the easing of travel restrictions.
“I’m relieved. I’m optimistic. I’m excited. I’m grateful,” Southwest Airlines CEO Gary Kelly said on the airline’s earnings conference call Thursday.
“We’re starting to see the light at the end of this very dark tunnel,” American Airlines CEO Doug Parker told investors.
“Oh, what a difference a year makes,” United CEO Scott Kirby said on Tuesday.
Soaring travel demand, which started in March and shows little sign of slowing down as the summer season approaches, is good news for the struggling industry. On its own, Southwest lost $ 1 billion in the first three months of the year.
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But it comes at a price for travelers: higher ticket prices. Passengers who have not flown since the pandemic and expect to find the great fares they have read over the past year are likely to be disappointed, especially on popular routes and during peak periods like holiday weekends.
Airlines that were suspending cheap fares to help fill planes during the pandemic suddenly find themselves able to increase their fares as short-term and long-term bookings increase at a good rate. Delta’s bookings in March were twice as high as in January. Advance bookings from the Southwest for summer travel are so strong that the airline will operate almost as many flights in June as in 2019. And American said its net daily bookings this week hit 2019 levels without benefit from a lot of international or business travel.
In earnings calls with investors over the past week, as they released quarterly earnings, airline executives were not shy about discussing the new leverage they have to raise the price. tickets thanks to pent-up demand for travel to the United States and closing international vacation spots. like Mexico and the Caribbean.
Alaska Airlines’ average fares for peak summer flights booked to date are higher than 2019, according to Andrew Harrison, the airline’s commercial director.
“I think you’re going to see a safe but stable climb,” he said.
Vasu Raja, chief revenue officer for American Airlines, said ticket prices booked at the start of the year were about half of 2019 levels. While the airline monitors bookings in early summer, a he said, the figure reaches 90%.
The American, he said, is doing “all we can” to increase average fares per passenger, or returns as they are known in industry jargon.
It’s a matter of supply and demand, said Raja and others.
“We see a lot of cases, especially during peak holidays and things like that, where frankly the demand for seats is greater than the supply of seats,” Raja said.
United Airlines is also managing fares more than it did during the pandemic and appreciating the trends seen, according to Andrew Nocella, commercial director. So far, the average fares paid for domestic leisure travel in mid-June are up from June 2019.
“We still have a long way to go, and this summer is still a long way off,” Nocella said. “I’m really pretty optimistic that we’ve turned the corner on this.”
Are cheap pandemic flights a thing of the past?
The bottom line for travelers: start buying tickets now or risk higher prices or a less than desirable flight route.
There will still be pockets of good deals, of course, especially on routes with intense competition and especially from budget carriers. Allegiant and Frontier were touting rates of $ 29 via email promotions Thursday.
The offers could become widespread if there is another increase in coronavirus cases or if the CDC and other government entities announce travel restrictions, which could hurt travel demand. Reservations to Mexico were hit in January after the CDC said it would require travelers on international flights to the United States to show proof of a negative COVID-19 test or virus recovery on board.
The US State Department earlier this week raised its alert on dozens of foreign countries, including Mexico, to “do not travel” status, but leaders in the Southwest and the United States said Thursday that ‘they hadn’t seen any impact yet.
Another unknown as summer approaches is whether airlines are giddy and add too many flights. This would bring the equation back in favor of travelers. Already two new airlines, Avelo and Breeze, are set to debut.
“We are very aware that it will always be complicated and that we will have to manage with care,” said Kelly.
How to save money on airline tickets this summer
►Don’t hang around, especially if your travel dates and destination are set. Last-minute deals were common at the start of the pandemic because very few people, especially business travelers who buy expensive last-minute tickets, were traveling. But airlines say traditional booking models are back, so they know where demand is high and are re-holding some seats in the hope of a last-minute bonus. As with travel during the holiday season, if you see a fare that works for you, grab it and don’t look back.
►Be flexible with your destination and dates if your only goal is to go somewhere this summer. United has just added a new feature in which you indicate your home airport and dates and a map appears with flight prices. Google Flights also has a popular map feature.
►Travel Tuesdays and Wednesdays. Budget carrier Spirit said it was more likely to offer offers on those dates to fill planes this summer than on weekends, when demand is already high.
►Postpone your trip until late summer or early fall. It’s a slower time for vacation travel, and if business travel doesn’t rebound significantly, airlines will need to lower fares to lure vacationers into the lull ahead of the busy Thanksgiving travel season. and Christmas.