A new report from Oliver Wyman says US leisure travelers are ready once again to fly the friendly skies.
The firm's recently released airline economics analysis report predicts US leisure travel will lift the domestic airline industry to a post-pandemic recovery by early 2022, buoyed by the rapidly increasing availability of vaccines as well as the $1.9 trillion American Rescue Plan Act passed by Congress.
"A year ago, we would have thought that a full domestic recovery in this timeframe for the US was almost impossible, but the combination of pent-up demand, economic stimulus, and access to vaccines is making a difference," says Tom Stalnaker, a partner and global aviation practice leader at Oliver Wyman. "We are still far from a full recovery for the overall industry, but we expect some of the airlines to start turning cashflow positive in a matter of months, particularly in the US."
As summer approaches, and formerly cooped-up travelers look to take to the skies again, demand for flights is set to spike. The firm's Pandemic Navigator is now predicting the US will reach herd immunity by mid-June to early July, 3-6 weeks ahead of earlier forecasts.
Things may be looking up for domestic leisure travel, but Oliver Wyman says not to expect the same pace of recovery for international or corporate travel. According to the report, both remain down more than 80 percent from 2019, and it's not expected those market segments will recover before 2023.
"The overall comeback of travel will depend on how fast nations get their populations vaccinated and standardize their health passport travel protocols and testing regulations." Stalnaker says. "But make no mistake, the demand to travel is here and we don't see it going away anytime soon."
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