US passenger numbers have seen a slight dip in the last few weeks. After a strong July, most airlines reported seeing little to no impact from the Delta variant. However, come August, airlines started to indicate some impact from the rise in cases on future bookings and close-in cancellations. However, is the Delta variant entirely to blame?
US passenger numbers dip
For much of July, US passenger numbers were riding high. Well over two million passengers in a day was the norm, and it appeared that airlines were finally starting to ride out of the storm of the pandemic and into the clear. Most airlines also publicly stated there were no impacts to their revenue and bookings from the variants.
However, from mid-to-late July, the Delta variant started to spread rapidly across much of the US. This includes key vacation destinations like Florida and Texas. In addition, some destinations started to impose new requirements for masking and limits on capacity.
The average daily passenger count from July 1st through the 14th came out to 2,004,220 passengers, using data from the Transportation Security Administration (TSA). The average for August 1st through the 14th came out to 1,973,077 passengers.
Below is a graph of daily passenger numbers from July 1st through August 14th:
The August travel environment
Let’s first compare 2021 with 2019 travel numbers.
In general, August is relatively on par with July looking at 2019. Note that the slight discrepancy in data from the start of the month relates to the July 4th holiday. Data from the TSA does not look at the same date in 2019 but rather the same weekday.
However, many different factors influence travel in August. In general, leisure travelers, which travel heavily in July, start to slow down in August. This comes as schools reopen in various jurisdictions across the country. Some schools start earlier in the month, and most go back to school by the time Labor Day comes around in September. This leads to a deceleration of leisure travel throughout August.
Is the Delta variant to blame?
In general, heading into the fall, there is some slippage in daily numbers and bookings from leisure travel as schools go back in session. Airlines are prepared for that and expect to see it every year. Business travel can help offset some of that. More business travelers are ready to go back on the road with their kids in school, and September is typically one of the heavier business travel months.
The recent dip in passengers seems to align more with the overall leisure travel dip that comes in August but was not offset by business travel this year, which remains depressed.
Southwest Airlines and Frontier Airlines have expressed some concerns over the Delta variant. Southwest indicated that it was starting to see an impact from the variant and pulled back some of its third-quarter expected revenue.
Frontier Airlines also pulled back some of its revenue guidance, though it discussed that alongside the release of its second-quarter results. The airline stated it was seeing some softening in leisure demand.
Leisure travel traditionally does not create relative swings like this. However, in the current environment, leisure travelers and bookings make up a much larger chunk of the revenue pie and daily numbers than in 2019, hence some of the swings this year. Most airlines had expected some of this to be offset by accelerating business travel in September-onwards. Still, it remains unclear whether business travel will be impacted by the rise in cases over the variant.
Airlines recognize this, and the recent guidance they have given indications that there is some softening of demand amid the recent rise in cases. Nevertheless, daily passenger numbers have not seen the precipitous downfall in daily numbers that they saw in early 2020. Some of the dips are likely attributable to the variant, but other factors at play can impact leisure travel.
Have you altered your travel plans over the Delta variant? Let us know in the comments!
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