Crisis Changes Airline Booking Trends; Pent-Up Demand Awaits Opportunities To Travel

The Covid-19 crisis has changed the way airlines fundamentally operate, from scheduling to pricing and yield management. Speaking at the November CAPA Live virtual Summit, United Airlines’ VP Pricing and Revenue Management, Dave Bartels, said, the environment today is “unlike anything I've seen in my career”.

The most obvious challenge in the current environment is that demand has fallen so precipitously, but also so unevenly from geographic and sectoral perspectives. Mr Bartels said, “there's certain markets, time channels and advanced purchase ranges where demand is actually not that far off from normally levels. But then there are lots of others where it's down massively from what you would expect”.

The historical data is “pretty useless” in this environment, “and so we're doing things a lot more manually, because the systems just aren't designed for this level of shock to the demand environment and the uneven nature of it”, he added.

Business travel is dramatically down compared to personal travel, and the latter tend to have lower loyalty to brands than a frequent business traveller, as well as higher price sensitivity.

Skyscanner Director of Strategic Partnerships, Flights, Gavin Harris, says that uncertainties surrounding travel restrictions have “translated into shorter booking windows and an increase in last minute travel”. He added, “we're seeing a window of under seven days become the norm”. There has also been a significant shift to one-way travel from return travel and a "prolonged and more recent shift" to domestic travel interest in multiple markets, with growth dominated by APAC markets.

Encouragingly, data trends show a real desire from people to travel when they can. “There is almost an immediate spike in traffic every time there is a high-profile media article or a government announcement around the removal of restrictions”, said Mr Harris.

The CEO of Ryanair DAT, Eddie Wilson, agrees, telling CAPA Live, “there's much more close-in bookings than before - we're going to have to retrain the [yield management] machines on that”.

Ryanair remains upbeat that the market will bounce back. “I think it'll take longer for business traffic to come back, but I think there's so much pent-up demand. We saw there with the Canary Islands when they came back on the ‘green list’ for the UK. We jumped from 2000 bookings a day to 28,000 bookings a day. The same thing happened with Portugal. People still want to travel, and that's not going to change. The human race is remarkably resilient”, Mr Wilson said.