What is the Future of the Airline Industry? A Q and A with Airline Industry Analyst Henry Harteveldt
At the beginning of the pandemic, airlines cut routes and laid off employees to stay afloat amidst shutdowns. Now, as we inch closer to a year since the pandemic began, and travel begins to return slowly, airlines are adjusting their business practices for COVID-era travel. Skip caught up with Henry Harteveldt, a nationally respected airline industry analyst frequently sought out by airlines and journalists alike, to give Skip users an exclusive look at the future of air travel. Read on for a Q and A with Harteveldt, and of course if you are planning future travel consider enrolling in Skip Plus to get your travel needs (such as travel alerts, passport concierge services, and TSA enrollment), taken care of for you.
Q and A with Henry Harteveldt
Skip: Can you tell me about your career and background?
HH: For the last 20 years, I have been a travel industry analyst. In 2011, I started my own company, Atmosphere Research Group. We’re a travel industry market research firm. We focus our research on a variety of commercial and technology topics.
Skip: Thanks! We’re seeing many airlines dealing with major layoffs and financial struggle. The airline industry has requested further bailout money which hasn’t come through. Do you think this trend will continue, or are you expecting the industry to bounce back soon?
HH: The travel industry will not bounce back soon...the research we are seeing is showing an estimated 3 year timeline to fully recover to pre-COVID levels. That depends on when vaccines are approved and when they become distributed. But that puts us in 2024 for a full recovery, although we do expect leisure travel to recover faster than business travel.
Airlines have had to scale back their operations. They have given people various options: unpaid leaves, voluntary early-out packages, and notably some involuntary furloughs. American and United have had to lay off about 32,000 employees. Those are some of the toughest decisions anyone ever makes.
Skip: Why might leisure travel return first?
HH: Leisure travel is entirely discretionary, which means individuals are in charge of when and where they travel, although travel restrictions certainly have an impact. But if a person wants to travel somewhere that’s open, and they’re willing to put up with any inconveniences--that’s their choice and they can do it.
Skip: What do you think is the most important factor to the industry’s recovery?
HH: I cannot say this enough: the travel industry’s recovery hinges on society’s ability to manage and control the virus to make sure vaccines and therapies are available. That communities keep spread minimal. Because it doesn’t matter if you have a preflight test, as we’re seeing with Hawaii and London, if the activities you want to do are not available to you.
Skip: We are seeing domestic travel start to tick back up. Do you think passengers are beginning to feel safe traveling domestically again?
HH: Yes, I think people are willing to travel domestically. The risk of contracting COVID on a flight itself is actually fairly small, as long as people wear their masks, keep their cabin movement to a minimum, etc. We are starting to see some strong weekend travel trends based on TSA’s data. But we still don’t have business travelers back. Business travelers account for 45% of US travelers in a normal year, and right now they account for less than 10%. The industry has become entirely dependent on leisure.
Skip: Are airlines making adjustments to draw in leisure travelers?
HH: Absolutely. Airlines have adjusted their flight schedules and their route networks. In some cases, they have canceled flights. But in others, they have added nonstop routes to leisure friendly destinations, like South Florida, Puerto Rico, and Palm Springs. From the perspective of the leisure traveler, there’s probably never been a better time in terms of convenience of getting to a leisure destination and great airfares. But of course, you can’t ignore the fact that you are traveling in a pandemic.
Skip: Some airlines have announced that they will stop blocking middle seats. What’s your perspective on that as an analyst?
HH: Airplanes are expensive, and they have to be paid for. The only way you can cover your costs as an airline is to sell as many seats as you’re able. And there’s now a variety of tests that show that with the way aircraft cabins air circulation systems are designed, coupled with people wearing masks, and distancing where they can, your chance of catching the virus on a plane is small, although it’s not zero. If you layer on some testing, you are even further reducing the chance that the people traveling are carrying COVID.
Airlines have not backed away from cleaning the planes. They are maintaining focus on keeping airport facilities clean and their aircraft clean and investing in UV light-emitting machines that eradicate the virus in the cabin and fog spraying disinfectant.
Skip: In terms of consumer confidence, people may not fully understand the ventilation protocols in airplanes and that their chances of contracting the virus are low from flying, maybe even lower than some other everyday activities. How do you think that will shift?
HH: Airlines have invested a lot into PR and social media to get the word out about the activities that they are undertaking to keep aircraft clean and they’re using email marketing campaigns. They’re creating videos to illustrate how they clean cabins….remember, the airline industry has been through pandemics, like MERS, SARS and H1N1 over the years. They learned that they had to improve air quality to reduce the chances of viruses spreading...cabin air is recirculated roughly every 2 minutes. It’s certainly cleaner than the air in our homes, offices, shopping malls and other enclosed public spaces.
People worried about getting sick on an airplane are worried about the wrong part of the journey. The airplane is one of the safest places from a health standpoint. Other transportation, like ridesharing, a taxi or public transport, might not be as clean.
But of course, it’s not carefree flying. I want to respect that fact that we are still living through a pandemic, in a highly dynamic environment. This disease has a mind of its own.
Skip: Thank you for sharing your perspective with us Mr. Harteveldt.
Conclusion: Leisure Travel Could Save the Airline Industry
As airlines adapt to the pandemic, they are shifting their focus from business travelers to leisure travelers. It could take the industry years to fully recover from the impacts of COVID-19, but travelers are beginning to return to the skies (and airlines are making adjustments to keep them safe). The riskiest part of travel for many passengers is likely the airport, rather than the flight itself, as Mr. Harteveldt explained. If you’re preparing for future travel, you can keep yourself safe by enrolling in TSA PreCheck, wearing proper PPE and maintaining distance from others whenever possible.
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