Will you or won’t you fly this holiday season? According to United Airlines, the week of Nov. 23 will be its busiest since March as customers travel to see loved ones, spurring the airline on Monday to add 1,400 domestic flights to its schedule the week of Thanksgiving.
But those added flights may be based on “wishful thinking,” according to John Grant, an analyst for OAG, who expects flights to be consolidated once the holiday gets closer.
United Airlines (UAL) saw its shares jump on Monday after Pfizer (PFE) said its experimental COVID-19 vaccine was more than 90% effective. Shares of other airlines jumped as well, including Delta Air Lines (DAL), American Airlines (AAL), Southwest Airlines (LUV), and Jet Blue (JBLU).
The potential breakthrough doesn’t come early enough to reverse an anticipated blow to the industry’s typically lucrative season. “In terms of bookings and activity, it’s still relatively quiet … It’s not going to be a classic Thanksgiving for the airlines, that’s for sure,” Grant told Yahoo Finance Live on Wednesday.
With Thanksgiving just over two weeks away, U.S. carrier flight schedules for November and December remain reduced between 40% and 50% compared to their schedules in 2019, according to the airlines and OAG. U.S. carrier schedules started to slide in March when schedules were reduced 0.4% compared to the prior year, followed by steep year-over-year drops of 58% in April and and 73% in May.
“Clearly that’s not a growth scenario,” Grant told Yahoo Finance in a previous interview.
However, Grant said U.S. domestic travel has seen larger capacity gains than travel in Europe, and elsewhere over the past two months. From Sept. 7 to Nov. 9, U.S. flight capacity grew by nearly 13%, he said, whereas capacity for the rest of the world declined by 9%. Meanwhile, domestic flight capacity in China has surpassed 2019 capacity by 6%, with load factors, or the percentage of filled seats among those available, hovering around 70%.
“Since September, there has been a divergence of confidence between North America, and probably the rest of the Western world, in terms of confidence around adding capacity back in…particularly for the forthcoming holiday season,” Grant said.
He predicts that factors responsible for the divergence include varying levels of fear over a second spike of COVID-19; government travel restrictions including quarantine mandates that make it difficult for Europeans to travel internationally; and Americans’ comfort with and broader access to intra-country travel.
‘A preemptive marketing type message’
Neej Gore, president of the Data Cloud Division at Zeta Global, which tracks travel trends and makes projections for intended travel based on consumer activity online, told Yahoo Finance that he expects United’s main competitors, Delta and American, to follow suit and add flights to their Thanksgiving week schedules — though he’s not entirely convinced that United’s change can be attributed solely to demand.
“I think that this could be sort of a preemptive marketing type message, saying, ‘We’re opening up new flights. You should consider traveling.’ I also think United has had a lot of very full flights, from my personal experience, and also from what I’ve heard, anecdotally, and I think that by opening up these flights people may be more convinced that they’ll have middle seats open,” Gore said.
“I imagine that part of it is wishful, and part of it is probably reacting to some demand they’re seeing,” he added.
Based on his company’s data, Gore said he does not expect Thanksgiving travel to give airlines much of a boost, because traffic patterns over the past three years have shown a much larger jump in bookings for travel between Christmas and the New Year.
Other U.S. airlines have already planned for the ability to carry more passengers over Thanksgiving. According to OAG, this week Delta is offering 2.8 million seats, compared to 3.1 million that it will offer during the week of Thanksgiving. Southwest this week has 2.4 million seats for sale, and will increase capacity to 2.9 million over Thanksgiving. Spirit Airlines (SAVE) is offering 526,000 seats this week and will increase capacity to 743,000 Thanksgiving week.
On the other hand, according to OAG, American has 2.7 million seats for sale this week, with its current plans showing it will decrease the number to 2.5 million during Thanksgiving week. United’s available seats this week totaled 1.89 million, nearly on par with the 1.86 million on its schedule for Thanksgiving week.
All of that could change, as airlines can add and remove flights, day to day.
In an email to Yahoo Finance, a spokesperson for American Airlines said that during the months of November and December the airline’s flight schedule will operate with 50% fewer global flights than November and December last year, with the exception of the last two weeks in December, when its schedule will be reduced by 45%. In October, its schedule was reduced 55% globally. The company said January schedules are still being worked out.
“In an effort to match low demand resulting from coronavirus (COVID-19), we continue to operate a reduced schedule,” American’s spokesperson said.
‘The flat trend will continue’
The number of people actually purchasing tickets for flights is a bit more difficult to pin down. Most airlines don’t share booking data for prospective flights, and passengers are purchasing tickets much closer to their dates of travel than they did prior to coronavirus. However, estimates can be made using data from consumer behavior online travel services, airport traffic, and TSA screenings.
According to Zeta Global, airport visitation to U.S. domestic public airports has been recovering since pandemic lows in mid-April, yet hasn’t changed significantly since the end of March.
“It looks like the flat trend will continue,” Gore said. “People are sort of taking the same travel patterns that they have for the past several months.”
He expects travel bookings to continue to be less depressed in U.S. regions such as Texas, Arizona and the Southeast, where COVID-19 restrictions have been more flexible.
Still, because data shows today’s passengers are booking air travel much closer to actual travel dates, the predictive data could fall short. Most passengers today are booking within 14 days of travel, whereas in prior years holiday bookings tended to be made 3 to 6 months in advance.
According to the TSA, airport screenings have seen a similar plateau, ranging between approximately 516,000 and 1 million passengers per day since Sept. 1. The number surpassed 1 million on only one day during that time frame, Oct. 18.
Delta’s President, Glen Hauenstein, said during the company’s October earnings call that bookings around Thanksgiving and Christmas had been showing signs of consumer confidence, even though planned capacity levels for December were 40% to 45% lower than in 2019, or approximately 60% lower when blocked seats were factored in.
“As we approach the holiday travel period, we’ve been pleased with the recent booking trends for Thanksgiving and Christmas, which show that customers continue to gain confidence in booking further out,” Hauenstein said. Off-peak periods in December and into early January, he said, were also showing more activity than in September.
In a statement to Yahoo Finance, a Delta spokesperson said the airline is closely monitoring the rise in COVID-19 cases and its potential impact on demand and government travel restrictions.
“Throughout the pandemic, we’ve seen that customers continue to gain confidence in booking travel, in response to expert medical research on the safety of air travel and Delta’s multi-layered approach of cleanliness, space and safer service through the Delta CareStandard,” the spokesperson said.
Read more:
Large-scale airline layoffs could cause ‘great, great economic harm,’ union warns
Airlines desperate for travelers adopt their own spacing, sanitation rules post-lockdown
Alexis Keenan is a legal reporter for Yahoo Finance and former litigation attorney.
Follow Alexis Keenan on Twitter @alexiskweed.
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