Airlines in the USA are set to face significantly lower passenger numbers than previous years this November. Thanksgiving is normally one of the busiest times of the year for US airlines. However, the ongoing coronavirus pandemic looks set to minimize airline revenue over this otherwise lucrative period.
Trends concerning other US holidays
2020 has been a hugely challenging year for airlines across the world. American carriers had been hoping that Thanksgiving would represent a glimmer of hope in terms of a revenue boost. This is due to the typical increase in passenger numbers around this time, as Americans travel to enjoy the festivities with their families. The celebration takes place on the fourth Thursday of November.
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Research conducted by travel data provider OAG has shown that other typically busy times for the American airline industry, such as Labor Day and the summer season in general, have indeed seen small spikes in passenger demand. However, these have not proved to be long-term phenomena.
Following these spikes, demand has quickly returned to the much lower levels typical of the ‘new normal.’ According to OAG, Thanksgiving is currently looking as if it will pan out even worse than national holidays earlier in the year.
The triple threat
OAG’s research examines the number of bookings for November 2020 held in September on three American legacy airlines. These figures are compared with last year’s data under the same parameters.
The differences are striking, and perhaps even starker than one might expect. Bookings for November on American Airlines and United Airlines are presently just under 25% of last year’s figures. Delta Air Lines is currently only managing just over 11%. The full table of data can be seen below.
The lower demand is not the only threatening aspect for US airlines this Thanksgiving as far as revenue is concerned. OAG predicts that many of the bookings will have been paid for by vouchers issued to passengers as refunds for canceled bookings earlier in the year. As such, airlines will receive less money upfront than in 2019. This was a year that did not see such widespread cancellations as those caused by the coronavirus pandemic. OAG states that:
“A triple whammy of fewer bookings, vouchers being used, and low yields just compound the misery for the carriers.”
Late capacity cutting
You may have noticed that, in the data table above, there is minimal difference between the planned capacity levels of the two years. This is because there is a commercial advantage to leaving schedule changes late. A more realistic picture of the airlines’ November schedules should emerge in the coming weeks. OAG expects this to be around 50% of last year’s levels.
However, this creates a frustrating booking environment for passengers, who are forced to book later than they might like in order to be sure of their schedule. According to OAG, US airlines typically confirm their schedule changes 3-6 weeks in advance, with examples listed below.
This year’s Thanksgiving is set to be one like no other for American families. OAG’s data shows that the same can be said for the country’s airlines. One can only hope that the absence of a late-November revenue boost can be overcome by the carriers in question.
Are you planning to travel this Thanksgiving? How do you think the experience will compare to previous years? Let us know in the comments.