Southwest, Spirit, and probably some of the other low cost carriers are licking their chops right now. While the legacies will shrink, these guys will grab market share that will be ceded when this is winding down.

 

Airlines are shrinking due to weakened demand, not a plan to shrink to profitability as in the past. It’s hard to pick up what isn’t there. The core of the LCC’s revenue stream is leisure travel. Not only the airlines are taking it in the teeth. Many small businesses are going months with little or no revenue as a result of various stay at home orders and social distancing policies. There will be a bunch of restaurants and other small businesses that don’t open back up. A big percentage of people are going to either be without work, or trying to recover from months of little or no income. Taking the family to Disney World isn’t going to be a very high priority for a significant percentage of the leisure market.

 

That's what I keep trying to tell people. Everybody is like "all my friends are itching to travel once everything opens back up" like that is the only factor without taking into account the economy. How are all these people going to travel with the almost zero money they are making right now? Also, who is going to travel while any type of social distancing is still going on? That is why it will be years before we see 2019 numbers.

 

Lol no they aren't. They are all suffering. Gary Kelly warned Southwest could be "drastically smaller" going forward.

 

XJT did not get CARES money.

 

The rest of that statement included "if passenger loads remain as they are today"... which was weeks ago.

Read his more recent comments after amassing $15B in cash. He sounds very confident.

 

Exactly! The LCCs are going to clean house when this is over.

 

Oh, demand has improved since then?

 

I’ll try to add some facts. The TSA website publishes screening numbers each day at 9 am. Lowest was about 82k in a single day and highest was 171k in a single day (if my memory serves me right). Things are improving and loads are starting to go up.

I'm actually hopeful for the next few months.

 

Likewise, unemployment rates will start to drop as the $600 payment bonus ends forcing a lot of people electing to sit unemployed to go back to work - which a lot of businesses are ready for them to do so. We will also see states begin to reopen more and more, you can see the change in public sentiment just looking out the window of your own home, folks when this first happened were too scared to leave the house. Now the state governments cant even keep them off hiking trails, beaches, streets and the like if they try.

Just watching the news, CA basically has accepted the fact they couldn't stay closed any longer and had their hand forced to reopen due to the people saying enough is enough and defying sit home orders.

Travel will continue to pick up in a fairly constant upwards trend is my thought. Delta and AA are planning to increase their international network from May/June onwards and SW has even launched a summer sale to encourage those with the itch to travel to get out of town, let's hope everyone is ready for a nice vacation.