From Washington Examiner:

Ashley Nunes is the director of transportation policy at the R Street Institute. He argued that it’s not enough to know that travel is increasing. We also need to know who is traveling before we can declare the airlines on the runway to recovery.

“Airline stocks may be gaining altitude, but the industry has a long, long way to go. Balance sheets of carriers are disproportionately padded by business travelers. Few companies will want to assume the liability associated with having employees travel, even though we may be turning a corner in the pandemic. Legacy airlines need business travelers more than leisure travelers. They always have, and they always will,” Nunes told the Washington Examiner.

Still, many businesses have found a way to expand their market share despite these headwinds. The Washington Examiner asked R Street’s Nunes if that would be the case for the discount airlines. He didn’t believe so, at least in the long run.

“Low-fare carriers cater to a different type of traveler than legacy airlines. The latter relies on a handful of passengers to generate a significant share of their revenue. In the near term, the public may be cost-conscious, which bodes well for airlines like Southwest. I doubt such a trend would be permanent,” he said.

Featured Publications