United No Longer Sees Travel Recovery Directly Tied To The Course Of Covid-19

This is an exceptionally interesting development, if true, both for the recovery in travel but also beyond that for understanding how the U.S. is responding to the Covid-19 epidemic as it progresses.

During Thursday morning’s United Airlines third quarter earnings call, airline CEO Scott Kirby reiterated his view that we won’t see full recovery of air travel until there’s a widely available vaccine, which he anticipates in the second half of 2021. (There are plenty of people who expect to see it in the second quarter, but Kirby has been the most cautious throughout the pandemic of U.S. airline CEOs.)

However the airline also said that there appears to be a decoupling of travel bookings from the course of the virus, offering that “back in june when we saw a spike in cases we saw a direct and negative impact” on July and August bookings. However “over the last 8 weeks or so” the airline has seen steady progress in domestic bookings growth even has headlines and cases have moved both in a positive and negative direction.

  • That’s growth in leisure demand, not business demand, but they offered not seeing a falloff in travel demand even as cases have grown recently which is “from business perspective nice to see.”

  • At the same time we’re seeing a rise in total reported U.S. cases again, as well as cases in Europe.

  • United notes the numbers they’re seeing on consumer apprehension about travel “are at the lowest level during the pandemic.”

In order to project real recovery what United is looking towards is people back in their offices for work. The “occupancy rate of New York City skyscrapers is a metric” they’re looking at since people back in offices will mean a return to business travel – both by the companies that are back, and for those who would travel to go see them.

US hotels by the way are back to 50% occupancy, whereas about 67% is ‘normal’ this time of year. TSA security checkpoint throughput continues to grow slowly at best, though it did nearly hit one million passengers a day twice in the past week, but it hasn’t appeared to fall with rising virus stories or numbers.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. The “occupancy rate of New “York City skyscrapers is a metric” they’re looking at since people back in offices will mean a return to business travel – both by the companies that are back, and for those who would travel to go see them. ”

    I’m interested to see how this plays out. My office is in downtown DC. I’ve been working from home since March. There’s no way I’m going back to 5 days a week in the office. This situation has shown we don’t need to be there to get the job done. I save 3-4 hours a day not having to commute.

    I will still continue to travel, internationally, for business. But I have to tell you the way things were going, smaller less confortable seats, fewer rewards, making travel less enjoyable, I was on the verge of ditching my 1K, 150K/year travel and just doing more of it remotely or, hiring local, in country people to take care of things. I love being on the ground in these places. But air travel in recent years was sucking the fun out of it.

  2. Everything @David says is spot on. I’ll never be back in my office 5 days a week…maybe 2-3 at most but probably closer to 2. The commute plus cost is just so far out of wack from the benefits. I’ll still do international travel, but it will be more controlled and not like it was before.

  3. I agree with what David is saying COVID has changed everything and people will not be back in their downtown offices 5 days a week. I also agree with his point on smaller seats, less comfortable seats, devaluing rewards do suck the fun out of travel.

    I really wish an airline like United, Delta or American would reverse course during this time and reevaluate their business model. Instead of fighting for every budget conscious traveler with these basic economy fares, why not go in the opposite direction, by taking seats of the aircraft, bringing back free hot meal in coach once the pandemic ends, offer 1 free checked bag up to 50 pounds. If this means higher fares then raise the fares but trying appeal to all travelers from their high end business travelers to budget conscious travelers is having a negative impact on some travelers.

    I wish United, Delta and America would take this time to go back to how travel use to be and let Spirit, and Frontier squabble over the budget conscious travelers.

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