This post originally appeared on News@Northeastern. It was published by Mark Conti.
Air travelers this holiday season can expect to pay higher airfares and see busier airports as demand picks up and the industry moves toward pre-pandemic volume.
Passenger air travel hit a three-year high over Thanksgiving weekend, but is still down about 11% from 2019, according to the U.S. Transportation Security Administration.
“On average TSA screening numbers are approximately 90% of what they were in 2019. These numbers vary from day to day and by airport,” says Daniel D. Velez, a spokesperson for the U.S. Transportation Security Administration. “Some airports across the country are actually screening more people than they were in 2019. All New England airports are still below 2019 numbers.”
There were 2.56 million travelers nationwide on the Sunday after Thanksgiving, Nov. 27, more than any day in three years, according to the TSA.
“The Sunday after Thanksgiving this year and in 2021 were the busiest days and on the Sunday after Thanksgiving in 2019, TSA screened a record number 2.8 million people. However, the majority of busy days tend to take place during the summer, mostly around the Fourth of July,” Velez says.
Ravi Sarathy, a professor of international business and strategy who studies the airline industry in Northeastern's D'Amore-McKim School of Business, says the fear of COVID-19 has softened and people are more willing to travel.
“People couldn't go see family and friends for two years and, all of a sudden, everybody's feeling a little confident about boosters and vaccines and figuring, ‘It's not so bad anymore, so let me go see them,'” Sarathy says.
Travelers should expect higher passenger volume from Friday, Dec. 18, through Monday, Jan. 2, with the busiest days being Thursday, Dec. 22, and Monday, Jan. 2, Velez says. Expect larger crowds at peak travel times, which are usually 6-8 a.m. and 3-6 p.m.
“This season travelers should expect that the airlines are better prepared than last season at this time,” says Kathleen Bangs, spokesperson for FlightAware, a company that tracks the airline industry. “They have trimmed routes, added employees, new hires trained during the pandemic are more up to speed, and union negotiations have progressed with a number of the largest carriers. All of that bodes well for an optimal holiday travel season.”
Bangs said the two unknowns are weather and any virus impact, such as the COVID-19 variant Omicron that the industry experienced during the holiday season last year that caused high absenteeism.
“On average, airports will be busy during the end-of-year holiday travel season, but probably not as busy as Thanksgiving,” Velez says. “On average, airports will see about 90% of pre-pandemic levels; however, some airports will see more travelers than 2019.”
The number of travelers during the holiday travel season last year was below pre-pandemic numbers. On Dec. 23 last year, there were 2.19 million travelers, compared to 2.55 million in 2019, according to the TSA. In 2020 on that day, there were just over 846,000. On Dec. 24 last year, 1.71 million people traveled, compared to 2.58 million in 2019 and 616,469 in 2020.
Holiday travelers this year will be paying more for tickets.
The consumer price index for airfare was up 43% in October from a year earlier, according to the U.S. Bureau of Labor Statistics. Tickets were cheap in 2020, as airlines tried to lure travelers during the pandemic. The January to October consumer price index was up 6.5% compared to 2019. Year-over-2019 prices were low in January, peaked in May and have plateaued since then.
“It is already fairly well booked because people have been making decisions to travel based on a slightly different economic optimism. Prices have gone up, airfares have gone up. And if there's going to be any sales, I think airlines will probably wait to see how the picture looks for the winter weather,” Sarathy says.
Through 2022, airlines' unit costs are estimated to average 28% more than in 2019. The net interest expense per seat-mile is projected to rise 170%.
A major reason for the airfare increases is the price of fuel. The cost in cents per available seat mile for U.S. passenger airlines for fuel has been 4.86 so far in 2022 and 3.05 in 2019. For labor, it has been 4.93 so far in 2022 and was 4.41 in 2019, according to Airlines for America, an airline trade association and lobbying group.
Jet fuel prices are averaging $3.55, up 84% from 2019 and 122% from 2015, according to Airlines for America.
Sarathy says inflation and a possible recession could impact air travel next month and into 2023. The economic conditions could force airlines to maintain prices or even reduce airfares next year.
“If they've already raised prices, airfares, and there's a certain amount of doubt in the market about the recession and how it might reduce demand, then you're not going to be continuing to raise fares. So if you can't raise fares at a time when fuel prices are going up, then certainly that's going to affect margins,” Sarathy says.
Airlines are working to get into the black by the close of 2022 after struggling through the pandemic. Modest profits for 2022 are expected after taking on debt during the pandemic, according to Airlines for America.
The holiday travel season can be greatly affected by wintry weather, which often forces delays and cancellations. Summer air travelers faced a high number of delays and cancellations as staff shortages affected the airlines' ability to limit the impact. However, the industry has boosted staffing levels since the summer, especially with ground crews.
Airline industry employment has been on the rebound since it bottomed out to 34-year low during the pandemic. In September, U.S. passenger airlines employed the most full-time employees in 20 years at 467,300, an increase of 103,000, or 28%, since a low of 364,500 in November 2020, according to Airlines for America.
“The airlines say they have more employees now than they did in 2019, but that's also with a greener staff as so many senior people retired,” Bangs says. “The key is retaining employees in the critical but lower paying/lower benefit jobs like baggage handlers and ground service personnel. Many of those positions are now off-loaded by the airlines to the companies with the lowest bids so they have the challenge of finding and retaining employees.”