Grab those low airfares now because Americans eager to break out of the COVID-19 pandemic lockdown are driving up demand for airline tickets and prices.
"There's been a good uptick in leisure travel, but we're still down over 40% from what we were flying a year ago at this time," according to Airlines 4 America (A4A) President and CEO Nick Calio.
He told Yahoo Finance Live that by the end of the summer the airlines could be flying at financially sustainable levels. "That would be in, we're hoping, the 60% to 65% range," he said. Recent data backs it up. Daily throughput at the nation's airports has exceeded 1 million passengers since March 11.
"U.S. airline trends appear encouraging as the bookings recovery (early March through present) is the strongest it has been so far in the pandemic at 70%-80% of 2019 levels," Raymond James analyst Savanthi Syth told clients in her most recent note.
Syth said average round-trip U.S. domestic fares for May to August have increased, but are still 20% lower than comparable fares in 2019.
"We believe JetBlue (JBLU), Spirit (SAVE), and, to a lesser extent, United Airlines (UAL) have the most favorable near term fare trends and, thus, revenue recovery trends. Nonetheless, all U.S. airlines appear to be benefiting from a broad-based strengthening of fares into March," Syth said.
Cowen airline analyst Helane Becker anticipates a sustained increase in travel starting Memorial Day weekend. "With vaccines rolling out in the U.S., we believe we are within weeks of widespread reopening and an increase in travel," she said in a recent note.
Calio points to studies by the Harvard T.H. Chan School of Public Health that show flying to be safe in the age of COVID. "Their conclusion was that you are better off, you're safer on an airplane than you are in almost any other routine activity, the risk of transmission is very low."
'Herd immunity – by early summer'
Delta Air Lines announced it will resume selling middle seats on its flights and stop unblocking them May 1. "Our own expert, Chief Health Officer Dr. Henry Ting, estimates that the U.S. will reach 70%-80% vaccinated and thus achieve herd immunity by early summer," CEO Ed Bastian said in a memo to employees.
Delta is the last carrier to unblock the middle seat and Scott Mayerowitz, senior editorial director at The Points Guy said, "This move shows that travel is coming back in full force and that most flyers are willing to purchase a ticket on a packed jet.”
Mayerowitz said it no longer makes business sense for any airline to block seats because, "It is clear that there is tons of demand from vacationers." The airline industry is counting on it. A4A's Calio said demand and the vaccine are "going to increase that urge to get back out and up in the air."
Adam Shapiro is co-anchor of Yahoo Finance Live 3pm to 5pm. Follow him on Twitter @Ajshaps
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