European beaches and cities are jam-packed with U.S. tourists eager to venture across the Atlantic now that there are no COVID-19 restrictions to hold them back. But back at home, the air travel recovery appears tapped out.
Alaska Air Group recently forecast weaker-than-expected sales growth for the third quarter. Chief Financial Officer Shane Tackett told Bloomberg News that travelers¡¯ prioritization of international sojourns is coming at the expense of its primarily domestic routes and is weighing on fares. Meanwhile, Southwest Airlines in June ran a promotion for 40% off fares on trips between Aug. 15 and Dec. 14, with the week of Thanksgiving blacked out. Frontier Airlines last week had a sale for $29 fares on select days of the week through Nov. 15. Spirit Airlines offered one-way flights for $50 from Aug. 9 through Oct. 4 excluding Friday and Sunday bookings.
Airlines typically run sales when they¡¯re trying to stimulate demand for weaker booking periods, so these promotions don¡¯t bode well for the fall. For the better part of the last 18 months, airlines have had more demand than the country¡¯s aviation infrastructure could handle. There are still logjams in the airplane manufacturing supply chain that are keeping carriers from taking delivery of the jets they¡¯ve ordered, and other structural capacity constraints, particularly at the busiest airports, are limiting the number of flights they can operate daily. But that balance may be shifting.
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