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Industry trends, on the fly

on the fly: Head for the Beach — US Airline Capacity Trends

April 11, 2022

Leisure demand is red hot while corporate demand, though starting to pick up, has been slower to revive.

Analytics on the fly


On March 15, at a Wall Street investor conference, U.S. airlines sounded unequivocally bullish. “I have to tell you,” said Delta CEO Ed Bastian, “that we have never… seen demand turn on so quickly as it has after Omicron.” Delta is in fact seeing some of its strongest bookings in company history. Other airlines said more or less the same. Demand is so strong, in fact, that some U.S. carriers are optimistic they can offset the cost of higher jet fuel with higher ticket prices.

Source: Diio by Cirium

The pace of recovery does vary by segment. Leisure demand is red hot (Cirium data shows Q2 seats scheduled to and from Florida, for example, up 12% from pre-pandemic levels). Corporate demand, though starting to pick up, has been slower to revive.

Then there’s the important distinction between domestic and international. Shown here are scheduled seats as tracked in Diio by Cirium (as of March 21), comparing the current quarter (April to June) to the same quarter of 2019. Domestic seat capacity, you can see, is still down about 5%, though trends vary sharply by airline. Business-heavy airlines like Delta and United are still down by double digits. These airlines, importantly, are still missing a lot of domestic demand that normally connects to international flights. Put another way, fewer people were flying abroad during the pandemic, so domestic demand (the connecting traffic) dropped too.

But wait. International capacity for US airlines is actually down less than domestic. How can that be? The answer to that riddle lies within distance. Longhaul intercontinental capacity is indeed down sharply (especially to and from Asia). But shorter haul international capacity has never been greater, thanks to extremely strong demand in beach markets.

The standout is Mexico, where US airlines are scheduling 30% more seats this quarter, relative to the same quarter three years ago. Seats to Cancun alone are up 44%!

Next week: Europe’s Big Three

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