President and CEO of Airlines for America, Nicholas Calio, joined Yahoo Finance Live to break down the increase in Americans travelling bby plane and what this means for the recovering airline industry
ADAM SHAPIRO: Welcome back to “Yahoo Finance Live.” US airlines are ready for takeoff. Yesterday, we heard from Mike Boyd, who talked about the fact that we had on Sunday more than 1.5 million passengers, just Sunday, passing through TSA checkpoints at the nation’s airports, and the number continues to track up. But we want to talk about the other issue that’s going on and how the airlines are faring.
So to do that, we bring in to the stream Nicholas Calio. He’s President and CEO of Airlines for America, which is one of the largest trade groups in the country representing the largest airlines in the United States. Good to see you, Nick.
And I want to start off with something very basic, that domestic fares are up about still– they’re 20% lower to comparable fares from 2019. But Savi Syth over at Raymond James said all US airlines appear to be benefiting from a broad-based strengthening affairs into March. So when you speak to your members, what are you hearing about the trajectory, not only for their sustainability, but airfares?
NICHOLAS CALIO: Well, in terms of the trajectory, Adam, as we’ve discussed before, with this pandemic, we’ve learned that we can plan but not forecast. We are encouraged by the numbers going up. And people clearly want to travel. We’re encouraged by the vaccinations. Fares are lower.
But remember, what– before the pandemic started fares were at historic lows. And as demand increases, we assume the prices will increase. Also right now, bookings are looking a little better, but a lot of people are booking with tickets that they had for last– for flights last year, and the time to use those tickets were extended.
SEANA SMITH: Well, Nick, going off of that then, I guess now, we were just talking to the doctor last segment, he was putting a positive spin on it, but the number of cases– number of COVID cases across the country, yes, are down significantly, but they are increasing just a little bit. I’m curious just how you’re looking at it, how your members are looking at that, because we were, prior to that, just talking about this expected summer surge that we would see by people that just could not wait to travel once again.
NICHOLAS CALIO: Well, again, Seana, we’re very encouraged because of the vaccines. We’re also encouraged by everything that we have done for the last year. We have leaned into science and data very heavily right from the beginning of this. We, like the airports, have put in a multilayered risk mitigation protocol that includes our HEPA filters, the air filtration systems, face mask requirements, health forms, declarations, enhanced cleaning protocols, all of which has made a difference.
And the fact of the matter is, we went to Harvard, the Harvard School of Public Health, asked them to look at everything we were doing and the airports were doing and make an assessment of it based on the science and data that was out there. Their conclusion was that you are better off, you’re safer on an airplane than you are in almost any other routine activity. The risk of transmission is very low.
So we’ve tried to inform our customers about their safety in an airport and on an airplane and what they can do if they choose to fly. And many people are choosing to fly. And we think the vaccine is going to increase that urge to get back out and up in the air.
ADAM SHAPIRO: In fact, Nick, it was Helane Becker over at Cowen who said with the vaccines rolling out, they believe that, this is a quote, “within weeks of– we are within weeks of widespread reopening and an increase in travel.” As we get, hopefully, to what she’s predicting and we see TSA throughput at 1.5 million, when do you think we get back over that 2 million mark where– I realize you don’t want to predict. But you got to– from your– your clients hear, look, we want to get back to where we were two years ago.
NICHOLAS CALIO: We definitely want to get back to where we were two years ago, but we see that as taking a very long time. We think the recovery this time will be slower than it was after 9/11 and slower than it was after the financial crisis. There’s been a good uptick in leisure travel, but we’re still down over 40% from what we were flying a year ago at this time.
And so we’re hoping that by the end of the summer, we could fly back up to sustainable levels, and that would be, in this, we’re hoping for the 60%, 65% range. That, again, is leisure travel. We also need to see our business travel and international travel pick up, and that’s going to be a long time coming.
SEANA SMITH: Nick, real quick just on COVID passports, because I know you’ve been quoted in the past saying that they need to be– that we need to find a way to make these health passports both workable and also easy– as easy on passengers as possible, can you elaborate a little bit more on that and I guess just what you see as, I guess, what necessarily needs to be included in them in order to make sure that they are successful?
NICHOLAS CALIO: Well, we think it should all be– it should be mobile. It should be on your cell phone, give you a QR code so that you can flash it up there and it’s recognized anywhere, kind of like using a credit card, you know, in that sense. So it’s recognized all over as being legitimate, and it’ll show if you’ve been vaccinated, if you’ve been tested.
And we’ll have some other health information that will be in your hands, not in the hands of a government entity or a private entity. We think that would ease travel for– on a temporary basis to allow people to travel more easily and have a better idea about if I’m going to X, Y, or Z country or X, Y, or Z place where they have quarantines in place or a testing requirement in place, I could prove it and then not have to quarantine or be tested before I land or when I do land.
ADAM SHAPIRO: Nick Calio, it’s always good to see you. And just want to let everybody know that Harvard Medical School study that you talked about, people can read that study on your website at Airlines for America. So thank you–
NICHOLAS CALIO: Good point.
ADAM SHAPIRO: –once again, for joining us. Nick Calio is the President and CEO of Airlines for America.