Of all the industries that took a gut punch from the pandemic in 2021, airlines may have had it the worst. "At one point, the demand for travel was down 95 percent last year," says iHeartMedia Aviation Analyst Jay Ratliff. "It's really indicative of just how bad things were."
The plunge in air travel was reflected in the airlines' bottom lines. "They're expected to lose 35 billion dollars for last year...and that's just U.S. airlines...plus they took on another 67 billion dollars in debt," says Ratliff. "So, it's going to take some time for them to get on the other side of things."
There is reason for optimism in the skies as the calendar turns to 2021. Over the holidays, U.S. air travel reached its highest daily levels since the start of the pandemic, while the arrival of vaccines has sparked new optimism among leisure travelers. But if the airline industry is going to fully come back, it will need its bread and butter---business travelers, who typically account for 70% of airline revenues.
"The concern for airlines is once things return to normal with the vaccines in place, how many of these corporate travelers are gonna come back," says Ratliff. "Because if (airlines) don't see corporate travelers coming back in the numbers they need, they're going to be forced to raise fares on the leisure side of things for all of us."
In the meantime, airfares remain at historic lows. That means those planning to travel in 2021 should try to book as soon as possible. "Look for the best fare now, book it well in advance, grab the trip cancellation insurance for a few extra bucks, and lock in the fare," says Ratliff. "That way, if the airlines start jacking up prices as they may do, you are okay."