MIAMI – An interesting phenomenon is taking place in the US airline industry. And as you might guess, it’s due to the COVID-19 pandemic.
An analysis conducted by Bloomberg shows that US airlines are shifting their route structures away from ones dominated by business travel to ones geared more closely to the leisure customer. Alas, the outlook for business travel is gloomy. Companies simply don’t want to take the risk of asking their employees to fly unless absolutely necessary.
And, yes, there is the Zoom factor. Where people once thought it a necessity to meet with customers or attend a conference in-person, the mass adoption of video conferencing has, likely, permanently decreased the demand for business travel. The Bloomberg analysis quotes Bill Gates as estimating a permanent 50% drop in business travel.
Cirium, the global travel and aviation analytics company, estimates that 30% of the global commercial airplanes remain in storage. OAG, another such firm, reported that seat capacity remained at 50% in January 2021, compared with a year earlier. And new estimates from the International Air Transport Association (IATA) show that recovery will be slower than expected.
Rather than seeing a 50% rebound by Q4 2021, IATA now sees a worst-case scenario of a 13% improvement in passenger traffic over 2020 figures.
What’s the Solution?
So, what’s an airline to do? Well, it understands that folks have been locked down, deprived of sun and fun, and unable to visit loved ones. And to remedy that, it begins by placing less emphasis on the traditional hub and spokes structure that suited the business traveler and starts sending people to sunny destinations non-stop, even from secondary cities.
And so, travelers in places like Boston, Cleveland, Milwaukee, and Indianapolis should find more direct flights to warm locations. No transfers, no layovers. Just hop on the plane and see the sunshine three hours later. Nice.
Another phenomenon Bloomberg sees is the reunification of expatriates with loved ones in their home countries. Despite complex and ever-changing border controls and quarantines, people want to go home. In May, the report says, United Airlines (UA) will have an all-new service between Washington Dulles (IAD) and Accra, Ghana (ACC).
Lagos, Nigeria (LOS) will follow at a future date. Also, UA will start a new link between San Francisco (SFO) and Bangalore, India (BLR) in June. Not only is San Francisco a tech powerhouse, like Bangalore—it’s the US state with the largest population originating in India.
American Airlines (AA), meanwhile, is adding service from New York (JFK) to Tel Aviv (TLV) in May, while Delta Air Lines (DL) hopes to resume flights from Atlanta (ATL) and JFK to Lagos and Accra, respectively, this summer.
The trend apparently extends beyond the US. “Rebuilding our network [has been] driven in large part by demand of diasporas wanting to return home amid the pandemic, whether temporarily or permanently,” says a Qatar Airways (QR) spokesperson, referring to new flights from Doha, Qatar (DIA), to SFO and Seattle (SEA).
And other airlines can follow suit where they see pockets of demand of those wanting to return home.
What the route structure will ultimately look like, and what the balance between business and leisure will be is anyone’s guess. And certainly, it will be different than before the pandemic. But eventually, a new normal will emerge and we will get back to business in some manner, even if it’s not business as usual.
Featured image: Boeing 777-223ER. United Airlines is one of the few Airlines to have Pratt and Whitney PW4090 engines. Photo: Brandon Farris/Airways