Airlines say holiday bookings still strong
ATLANTA — Minneapolis business manager Roque Rossetti plans to make his annual trip home to Sao Paulo, Brazil, for Christmas. The 35-year-old said the sagging economy gave him no second thoughts about shelling out $1,200 for the ticket.
"If I wait longer, I’d probably pay more, and I might not end up going," he said. But, he added, "I’m secure. I don’t have kids or a wife. My house is paid for."
Several carriers have said that advance bookings show their planes are expected to be as full as or fuller than a year ago over the late fall and winter holidays — largely because they have taken so many seats out of the air, a decision that was made when fuel prices were soaring. In fact, travelers who have not booked flights for the holidays could find it more difficult and expensive than usual to find the flights they want, when they want them.
Because of the capacity cuts, fuller planes does not mean more people will be flying. It also may be tougher for ski resorts and sunny vacation destinations to keep their numbers up, though some are offering promotions to lure holiday travelers who may be hesitant to open their wallets amid an uncertain economy.
"I think the consumer now has a lot of things on their mind — they’re concerned about the economy, they’re concerned about the election, but I think they have already made the decision about what they are going to do over Thanksgiving and Christmas," said Arne Haak, chief financial officer of discount carrier AirTran Airways.
Haak said the carrier has not seen a slowdown in bookings over the holidays.
The picture is similar at Atlanta-based Delta Air Lines Inc., an executive said.
"I think it might be the newness of the information," Ed Bastian, Delta’s chief financial officer, said of travelers’ response to the economic crisis.
He said most consumers are still trying to figure out what the crisis means to them. Bastian said Delta’s domestic advance bookings for the holidays show stronger occupancy rates on a year-over-year basis and are in line with the carrier’s expectations, though he noted capacity cuts may be playing a role in that. On the international side, he said November-December occupancy rates based on advance bookings are down, though he noted Delta is increasing capacity on overseas flights.
At American Airlines, its occupancy rate based on advance bookings for the fourth quarter is down about 2 percentage points year-over-year, Chief Financial Officer Tom Horton said. That’s "not outside of the norm you might see varying from year to year, but remember we are taking capacity out of the system," Horton said. The fourth quarter, which includes the holidays, is traditionally a slow period for airlines.
A big change may be that, with the economy suffering, people are looking for better deals.
During a recent stop at Minneapolis-St. Paul International Airport, Georgeann Becker, 60, an attorney from a suburb of Denver, said she and her husband paid for a plane ticket for their daughter to fly home from New York to visit them this Christmas. Her daughter shopped around at the online travel sites and found a cheaper ticket than their travel agent, at around $350, which the Beckers are paying.
"I don’t know that we’re necessarily holding back. I think you do go out of your way to find the cheapest ticket," Becker said.
Airlines are not sure how long demand will hold up for them, and several expressed concern recently that demand will drop off in 2009 as the realities of a recession set in for more travelers.
AirTran’s Haak said, "Obviously that is something we’re going to keep an eye on."