Airlines See Strong Recoveries, Ramp-Up Challenges
SAN JUAN, Puerto Rico—Airlines on either side of the Atlantic are seeing big recoveries in passenger demand this year—some even back to 2019 levels—while also dealing with operational challenges as the air travel system restores.
There are also signs of changes in air travel passenger behavior trends, although it is too early to know if they will be permanent. Airline executives shared their experiences at the CAPA 2022 Aviation America Aviation & LCCs Summit in Puerto Rico May 26.
Virgin Atlantic VP networks, alliances and commercial planning Rikke Christensen said the UK-based long-haul carrier was “definitely in recovery for sure. Nov. 8  was a milestone for us because we saw the border restrictions to the U.S. lifted and 60% of our capacity is in the U.S.”
Virgin is now serving all the U.S. cities it flew to before the pandemic and expects to be at 2019 levels by October. “It is really coming back,” Christensen said.
But she noted “a lot of challenges, especially on the operational side.” She said partners, including airports and suppliers, were focused on addressing labor shortages and other issues. “We need to work on this together and trust that we will get this sorted. A disrupted summer is not what we need,” Christensen said.
Swoop head of commercial and finance Bert Van Der Stege described a similar situation for the Calgary, Canada-based ULCC.
“Last year was a year of recovery for us and about getting all our aircraft back in the air. This year is all about growth and demand is very strong,” Van Der Stege said. “But there are massive challenges within the aviation system. As an industry, we have done a phenomenal job of responding to COVID and now we face the challenge of ramping up. Inflation and labor shortages do not make it easy.”
Steve Rossum, CEO at Fort Lauderdale, Florida-based regional carrier Silver Airways, said his airline was back to 2019 demand levels, but noted constraints in availability of pilots and other skilled staff as well as continuing government restrictions related to COVID. But Rossum still saw “tremendous opportunity for growth in Caribbean markets and also for greater consolidation or at least more cooperation.”
Christensen said the customer profile was different. “There’s strong, pent-up demand in the premium leisure segment, where people have extra savings and want to treat themselves. We are seeing very strong demand for our premium cabins,” she said. “Passengers are also coming to our Clubhouse lounge earlier and drinking far more champagne. They are starting their holiday from there.”
In another change from pre-pandemic travel trends, “The booking curve is extremely compressed, with about two-thirds of our bookings for people traveling within three months,” Christensen said.
In the U.S., there are some shifts in the geographic demand focus where people moved to other cities or states during the pandemic.
“We are adjusting and learning from what we have seen. The problem is we don’t know what the new normal is. We have learned to be extremely agile,” Christensen said.
Rossum noted that the ongoing requirement for people traveling by air into the U.S. to submit a documented negative COVID test was “a major problem and significant inhibitor,” especially when people searching for vacation destinations cannot find information about where and how they will be able to get a test.
“People don’t want to invest time and resources into a ‘I don’t know,’” he said.