Third-Quarter 2021 Recap: Airlines Prep for the Holiday Season as Recovery Continues

October 14, 2021


  • Chinese domestic air traffic recovered to 78% of normal in the second half of September (from 66% in the first half of September) as travel restrictions started to relax toward the end of August. Domestic unit revenues, which reflects how many of an airlines’ seats were actually sold, also stabilized at 82% of normal in the second half of September. Domestic traffic at major Chinese airports improved to 80-85% of normal in the second half of September, up from the weak 35-65% of normal in the first half of September.
  • According to the Bank of America, its higher price target for Qantas is driven by assumptions regarding the reopening of international travel and by property monetization. The bank previously assumed a reopening of international travel to happen in June, however, given vaccination rates, it adjusted predictions to January. Qantas owns 14 hectares of mostly undeveloped land surrounding Sydney Airport. The company is in the process of exploring divestment options. As reported in recent press articles, Qantas has shortlisted parties for the auction’s second round. Its valuation now assumes successful monetization of the land in 2022 at $550 million USD, aiding in balance sheet repair.
  • Credit Suisse is seeing an initial, compelling stage of recovery for airlines, but specifically highlights that it expects to see continued attractive market share gains from Ryanair. The group also believes that Ryanair’s market share could potentially head toward 25% as it leverages network and efficiency gains, while competitors grapple with the challenges of restructuring cost bases as supplier costs and labor costs rise.


  • The International Air Transport Association (IATA) revised down its 2021 forecasts and provided its initial views on 2022. In terms of passenger traffic, IATA now forecasts 2021 traffic at 40% of 2019 levels versus the previous expectations of 43%. This compares to UBS’s forecast at 44% of 2019 levels. Furthermore, IATA now expects greater net losses of $52 billion versus previous $48 billion and UBS’s $32 billion.
  • United Airlines said it would terminate about 320 employees for refusing to comply with its vaccination requirement, putting the company at the forefront of the battle over vaccine mandates, as the economy moves through a bumpy pandemic recovery.
  • According to JPMorgan, airline credit card spending has been under pressure since the third week of July, synchronized with delta variant headlines turning undeniably grim. Week-on-week spend data turned negative on July 18 and continued to contract through quarter-end.


  • United Airlines announced that it plans to fly its largest domestic schedule since the start of the pandemic to meet an expected surge in holiday travel. In total, the airline plans to offer over 3,500 daily domestic flights in December, which would represent 91% of its domestic capacity compared to 2019. According to United, holiday travel flight searches on are up 16% versus 2019 levels, and the airline expects the busiest travel days to be November 24, November 28, December 23 and January 2.
  • Airlines stocks have historically outperformed the S&P 500 from September to December, and this seasonal trade held firm in September 2021 with the group rising 3.5%.
  • Delta Air Lines wants other airlines to share their “no fly” lists of unruly passengers to help protect employees across the industry. In an internal memo published last week, employees at Delta stated the airline has had more than 1,600 people on its “no fly” list and that it has submitted more than 600 banned names to the FAA in 2021 as part of the Special Emphasis Enforcement program. To commit to the safety of employees amid increasing rates of unruly passengers, Delta also asked other airlines to share their “no fly” lists, since a list of banned customers does not matter if that same customer can fly with another airline. 


  • The consensus is growing among management teams that the corporate recovery is likely pushed back to 2022 from this fall, given the return-to-office delays of major companies. Corporate flight demand has been down in the 50-60% range versus 2019 since June, after being down 90% in January and down over 70% in May. Delta Air Lines mentioned during the quarter that it sees a 90–120-day delay in corporate recovery.
  • Fourth quarter planned growth for U.S. airline carriers, based on current scheduling data of the various airlines is down 12% year-to-year (-5% domestic, -31% international) versus down 19% year-to-year (-7% domestic, -44% international) in the third quarter of 2021. Cuts were broad based over the last three weeks for both November and December months.
  • Airline pricing looks worse than is being actively reported. With long-haul travel still down significantly more than short-haul travel and with fewer last minute higher priced business traveler fares, the overall average ticket price has fallen more dramatically than fare prices on specific routes. So, while average advertised fares decreased by 15% during the second half of 2020, the implied average ticket price was down closer to 30% over that same period due to the change in mix.

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