At the start of summer, things were looking a little bit brighter for airlines: new coronavirus cases were decreasing and lockdowns were being lifted, allowing some travelers to feel confident enough to get back in the air, at least domestically. But last week, the Transportation Security Administration (TSA) announced a drop in the number of people traveling through airport security—the first weekly decrease since air traffic started rebounding in April—and experts fear we might have reached a plateau.
Here’s everything we know about the current situation with air travel and where we think things are headed next.
Air travel was on the rise from April through early July.
The TSA discloses the number of travelers who go through its checkpoints each day, and while daily numbers have fluctuated, there’s been an overall upward trend from mid-April through mid-July. On average, fewer than 100,000 passengers were traveling through airports each day in mid-April, while by mid-July, airports were regularly seeing at least 650,000 passengers per day. (In 2019, more than two million passengers traveled through airports daily throughout the same period.)
During this time, airfare also dropped significantly—according to a report by flight deals website Dollar Flight Club, domestic airfare costs 41 percent less than it did last year—which helped incentivize would-be flyers to book trips. (International travel is still generally down due to a number of countries closing their borders to U.S. travelers.)
But the TSA reported its first drop in the weekly passenger numbers.
Per CNBC, “In the week ended July 19, 4.65 million people passed through checkpoints at U.S. airports, according to the Transportation Security Administration, down more than 4 percent from a week earlier and the first weekly percentage drop since April.”
The problem? Coronavirus cases began to spike across the U.S. “Air travel had been slowly rebounding through late June and early July. But that's when news of a resurgence in coronavirus really took over the news cycle as several states started to see alarming case numbers,” said Ben Mutzabaugh, Senior Aviation Editor at The Points Guy. “Unfortunately, that trend has only continued and it seems to have spooked travelers. Several big airlines—including American, Delta, Southwest, and United—said during their second-quarter earnings call that they saw new bookings begin to trail off around then and that the trend has continued.”
Numbers will likely stay low through summer.
“I don’t see any appreciable increase in travelers between now and the end of the summer, especially with the 14-day quarantine restrictions implemented by some northeastern states,” said Chris Lopinto, president of ExpertFlyer.com. (Some states that have managed to keep their coronavirus case counts down, like New York, have placed mandatory quarantine orders upon any travelers entering their state from destinations with outbreaks.) “There likely won’t be an increase until the recent outbreaks are under control,” he adds. Summer is typically the busiest time of year for air travel, so this is a major blow to airlines who were hoping to see increased business during this period.
Things aren’t looking good for the fall or winter, either.
“Barring a vaccine or other breakthrough, this could be the worst fall and end-of-year period in decades for the airline industry,” said Mutzabaugh. Save for holiday periods, fall and winter are typically quieter times for air travel, especially in terms of leisure travel. “In normal years, that’s replaced by an uptick in business travel, but that’s something that’s not going to happen in 2020,” said Mutzabaugh. As most companies have shifted from offices to work-from-home scenarios, there just isn’t as much business travel anymore. “You’ll see a slow return to the level of business travel that there was before as people have gotten used to video calls instead of face-to-face meetings,” said Lopinto.
How have airlines adapted to attract travelers?
“Waiving change fees and rebooking restrictions helped restore confidence to book, but most airlines have already done this,” said Mutzabaugh. "Normally, airlines would reduce fares to entice people to fly, and traditionally that’s worked." But right now, it’s not the money that’s deterring potential travelers—it’s safety.
Passengers worry about onboard virus transmission, and airlines have already been working diligently to diffuse that fear. “Requiring all passengers to wear masks was a good first step, and the blocking of the middle seats would help as well,” said Lopinto. As of today, only Alaska Airlines, Delta, Hawaiian Airlines, JetBlue, and Southwest are currently blocking middle seats to keep passengers socially distanced—the other domestic airlines are willing to fill planes to the brim to sell more tickets and earn more money.
The other problem is the increase in outbreaks across the country, which is completely out of the airlines’ control. “Florida and Arizona are popular leisure destinations, for example, and both are hot spots at the moment,” said Mutzabaugh. “Further, some states have rolled out quarantine restrictions that threaten to complicate travel for those travel by plane.” Until travelers feel comfortable with the situations in their destinations, they likely won’t be booking any flights.
How are the airlines coping with the long-term decrease in demand?
All that airlines can do right now is stem the flow of cash, which unfortunately translates into downsized fleets, reduced routes, and staffing changes like furloughs, layoffs, and voluntary buyouts. Just last week, Delta reported a 91 percent loss in earnings this past quarter, or roughly $3.9 billion, which has led the airline to reportedly propose pay cuts for pilots in lieu of involuntary furloughs, as well as to halve the number of flights it had anticipated to add back to its already-reduced network in August. And this week, Southwest announced that some 17,000 employees, or 28 percent of its workforce, have signed up for voluntary buyouts.
Despite the growth in air travel from spring into early summer, things are still looking grim for airlines and likely will be until a coronavirus vaccine is developed and administered to the public.