Summer is traditionally peak season when airlines are the busiest. It’s heavy leisure travel season, when people fly internationally to Europe and beyond. And that season ends around Labor Day. Yet air travel this summer has plateaued around 25% of last year’s passenger volumes.
Throughout June things were improving for domestic flying, at least, but the recovery in air travel largely ended after that. Covid-19 cases grew in the United States. Cities and states imposed quarantine requirements for arriving passengers that have kept people away.
And we’re approaching the end of peak leisure travel without business travel coming back in behind it to make up some of the difference. Offices remained closed or at less than full capacity. Companies are keeping people off the road, and they don’t have clients in offices welcoming visitors if if they weren’t. The meetings industry is basically non-existent. And international premium business isn’t returning either – even if other countries would welcome American business travelers.
American Airlines Senior Vice President Vasu Raja explained to employees on Wednesday how crucial business travel is, how their route network is changing, and that right now they’re just looking to make it to and through next year.
The nature of business travel which is so critical to international is changing before our very eyes..we’re going to be smaller next year because demand is going to be down.
…Right now between our own network and our partnerships, the American Airlines is going to come out of this crisis is going to have a lot more places to launch widebodies, and because we have a simplified widebody fleet – we have 787s and 777s – anything can go anywhere. Before we were limited where we had 330s but those things could only fly in Philadelphia… next year it’s going to look different, there’s no going back, the world has changed. But the more we can make it to next year and through next year which we will do, the more we set ourselves up for success.
In answer to another question though, Raja emphasized that September is going to be worse than June – and what schedule changes will result for his airline.
As we get into September there’s less demand than there was back in June and interestingly what we’re seeing is where that demand is weakest is all of the markets that are most dependent on business. In September where Miami gets seasonally weak as we get into hurricane season, what we’ll do is we’ll take out the Northeast a lot more, LA a lot more because that’s what depends on business and we’ll take out Miami a lot more. That’s not a permanent reduction by any means.
Flights between business travel markets will be reduced this fall, precisely when business travel is supposed to take over for leisure in the airline business. September is, as Raja says, likely to be worse than June for his airline – and for the U.S. airline industry as a whole.