Between the months of March and April in 2020, the airline industry took a huge hit. Industry reports suggest this sector alone dropped 86 percent in bookings and revenues as the pandemic took hold. While things have since improved, they are far from rosy. Thirty percent of all commercial airlines remain in storage. Likewise, the entire industry is only operating at half-capacity. Naturally, airline executives hope for some resemblance of normalcy soon, but this is highly unlikely. The future of airline travel is uncertain, and industry leaders are reconsidering their options.
With international restrictions in place due to COVID, both tourism and travel have been affected. (Want to learn more about how COVID has affected tourism and travel? Check out this Bold Business story.) However, leisure travel seems to be returning much faster than business travel at this point. Some, like Bill Gates, suggest that business travel will remain suppressed and stay around 50 percent what it was. With businesses realizing the cost savings and convenience of Zoom and other videoconferencing platforms, airline travel will fall. If this is indeed the case for the future of airline travel, then it’s evident changes will occur. And many top executives are banking on leisure travel to fill the gaps.
“Given the lack of business demand, we’re focusing on leisure travel and providing more service for customers traveling to visit family and friends.” – Brian Znotins, VP of Network Planning, American Airlines
A Focus on Leisure Travel Means New Routes
When business travel was king, airlines needed to make sure they had a notable presence in large metropolitan markets. New York, Chicago, London, Dubai and others were destinations that were non-negotiable. This classic hub-and-spoke pattern of airflight routes required travelers to go through major cities before arriving at smaller locales. But this may not be the case considering the future of airline travel. If leisure travel exceeds busines travel, airlines will quickly accommodate this demand. And as a result, more direct flights to vacation spots will become the norm.
These changes are already occurring, indicating how the future of airline travel is shifting. Hotspots in Florida, the Caribbean and Mexico have already seen an increase in direct flights. The same is true for Hawaii and other sunny escapes. In addition, diaspora travel with the pandemic has also increased the amount of leisure travel. Because of this, new routes to New Delhi, Accra, Brisbane and other less common destinations exist. The bottom line is that travelers will have less connections and new opportunities as a result.
“Everything we do stems from demand. The sunshine states are seeing much more travel demand than before, on a relative basis, while it evaporated in the Northeast.” –Ankit Gupta, VP of Domestic Network Planning, United Airlines
Pricing Effects with Airline Industry Changes
Overall airline travel for 2021 is expected to increase by about 13 percent over that in 2020. This is not a big jump by any means, considering the setbacks the industry suffered with COVID. As a result, airlines will have to continue to cut expenses, which naturally means offering fewer flights to customers. Thus, while the future of airline travel might be leisure travel, that doesn’t necessarily mean it will be cheap. In fact, long-term effects will likely mean fewer routes overall as well as higher prices. In this regard, the loss of business travel will be quite tangible for all airline passengers.
Industry gurus who following airline ticket prices note that current airfares are down about a third over regular travel costs. They except such cost savings to extend through the summer. But afterwards, they see the future of airline travel becoming increasingly pricey. With dramatically fewer routes, airlines will no longer benefit from the economies of scale they once did. This will not only force them to raise per-seat prices but likely cut back on other amenities as well. Increases in leisure travel will help, but it won’t be enough to overcome the impact of fewer business travelers worldwide.
“There’s an opportunity for travelers right now. Book now. Once more people are vaccinated and willing to travel, the deals are likely to dry up.” – Scott Keyes, Founder of Cheap Flights
Some Positives About the Future of Airline Travel
While prices will likely climb and route options decrease, some positive changes will also occur. For example, the pandemic has required airlines to be more flexible and forgiving in dealing with flight changes and cancellations. Nearly all experts believe these practices will be an inherent part of the future of airline travel. In addition, some lasting effects from COVID will further improve travel efficiencies. Boarding procedures will improve with less congestion on plane aisles when taking your seat. And contactless systems will remain, making the entire leisure travel process safer and faster.
One of the expected changes to occur with the future of airline travel involves in-flight meals. Rather than airlines offering these services, travelers will be more likely to arrange their meal ahead of time. Vending machines with hot and cold pre-packaged meals will be available for purchase. Not only might this reduce risks of spreading germs, but these may also improve food quality. Even with leisure travel, you might be eating meals more typical of business first-class.
Many Changes, Many Unknowns
The future of airline travel is difficult to predict given the many challenges that still lie ahead. Passenger facial recognition, vaccine passports, and touchless services will become pervasive. (For more on facial recognition scans for international travel, check out this Bold Business story.) Social distancing and mask-wearing will likely remain as a social courtesy even after the pandemic is over. However, it’s clear business travel will be slow to return, and leisure travel will reflect a larger percentage. This will drive airlines to change their approach in attracting customers to the skies. Those adopting strategies that best align with the leisure traveler’s needs will be the ones that excel. And those waiting on the return of the business traveler may simply not survive.
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