Despite the CDC warning Americans against travelling for the Thanksgiving holiday amid soaring Covid-19 infection rates across the country with 27 consecutive days of daily cases topping the 100,000 mark, many nonetheless carried on with their plans.
As a result, US air travel rose to the highest level since the onset of the pandemic, as nearly 1.2 million people were screened by the Transportation Security Administration (TSA) on Sunday – the most since March 16. However, despite what seems like a positive rebound for the airline industry, passenger traffic is still approximately 60% below the 2.9 million travelers that were screened by the TSA only a year prior.
Due to the sudden increase in demand for air travel, many airlines including United and American provided some of their employees with additional pay, while other airlines such as Delta actually ended up cancelling numerous flights after realizing they had a shortage of pilots over the holiday. Although airlines were anticipating a positive rebound in air travel over the Thanksgiving weekend, overall demand is still significantly well below last year’s levels, as ticket sales for the month of November slowed down amid a surge in new coronavirus cases and various warnings from health officials.
Indeed, the coronavirus pandemic has been nothing but bad news for the aviation industry, with the International Air Transport Association (IATA) recently announcing that global airlines are expecting revenues to drop from $838 billion in 2019 to a mere $328 billion in 2020. Albeit a 2021 forecast that calls for a modest rebound for airlines, the IATA warns that the road to recovery will be nonetheless very long and difficult. The association foresees that global passenger volumes will not return to 2019 levels until 2024 at the earliest, with domestic markets recovering relatively faster than their international counterparts.
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Information for this briefing was found via the CDC, the TSA, and the IATA. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
