Originally Posted by
FLYBOYMATTHEW
Any color would be purely speculation at this point. TSA checkpoint numbers have been around 6-7% of year ago numbers, and it's anybody's guess what they'll be at the end of the summer/early fall. I personally don't see demand returning that quickly. There likely won't be a vaccine by then, the economy and many people's personal finances are in shambles, and new unemployment is at record highs. I don't agree with the hope that there is some sort of pent up demand for travel. Events are being postponed until next year or cancelled, parks and attractions are mostly closed, and I would guess a large percentage of our passengers are more worried about paying their rent or car payments than taking a weekend trip to Vegas. It's going to take some time for the dust to settle before people are willing to spend their money on vacations. I can't imagine a scenario where traveller numbers approach 2019 levels for a couple years. Fall has typically been a slower time for us anyway, and many are predicting the legacies will furlough thousands in the fall, and without a return in demand, there is no reason to believe we're going to be flying a full schedule of partially filled planes or paying crews to sit around either. The silver lining is, I do think we will be poised to capture market share on the tail end of this, and will be able to capitalize on our cost advantages and have a quicker spool up time than many due to our single-type fleet structure.
https://www.google.com/amp/s/www.tra...ravel-2020.amp
Obviously that’s just a small snippet and not enough to build business hopes on, but saying their isn’t pent up demand is lacking in understanding of how the average person operates these days. It’s a pop tart, I want it now, YOLO society. And many won’t let personal finances get in their way. They’ll take a weekend getaway on credit because they’ve been cooped up. Many will feel they deserve it.
I’m not saying that’s a healthy mindset or smart way to run a household or finances. But it is reality. And don’t think for a second that airlines, destinations and credit card companies won’t sweeten the pot with their “deals” to get people out and about.
Not all or even most of the 30 million unemployed number represents the average, everyday income earner, and there’s 120 million other people who are employed. Also, there’s not some absolute stratification of customers that says that Spirit will suffer due to many lower income wage earners ensuring hard financial times. People will move up and down in product based on their monetary situation. Many who might have paid a lower AA fare will be looking at rock bottom ULCC fares now. In fact, many will use the extremely low fares as part of their excuse to go out and live a little.
We are not a nation of thrift or frugality. I would tend to agree with your assessment if it were so. But it’s not.
There will be a surge in demand in my opinion. Particularly if the popular vacation getaways open back up. It probably won’t be last year’s flying levels. And I’m sure it will tail off a bit after the populace gets the need to go somewhere for 3-4 days out of its system. It might settle at 60-70% of recent normal levels. That’s enough for us to get by for the time being. Maybe even thrive if we position ourselves well.
I agree with a poster above who says we may furlough, and that it will probably be short lived. I also agree that M/A is a real concern in the next 18 months imoho. There will be a few predators circling and other reduced legacies trying to pick up capacity, and maybe increase the size of their recently trimmed fleets. Likely after shedding contracts and other agreements in bankruptcy.