Transatlantic travel is booming, boosting airline revenue as Americans armed with a strong dollar fly to Europe and the UK.
United Airlines’ revenue from travel between the US and Europe increased 40% in the third quarter compared to the same period in 2019, to $2.5 billion. The average fare on these trips is up 30% compared to the previous year.
The strong dollar has been “helpful” in getting US travelers to book trips to Europe, United’s chief commercial officer Andrew Nocella said. What was an “amazing” summer season kept momentum going into the fall. The airline debuted several new routes last summer, flying 14% more seats in the Atlantic than it did in 2019, and plans to add more routes next year.
“It’s speeding across the Atlantic,” Nocella said.
All three major US airlines reported an increase in transatlantic revenue compared to 2019, and many European airlines also benefited from an increase in demand. Executives and analysts attribute the increase to the appreciation of the dollar against the pound and the euro. The pound is now trading at $1.12, while the euro is at $1.02.
The dollar’s influence appears in the direction of travel. Data from Dohop, a connecting flight booking platform used by more than 60 airlines including Spirit, Avianca and Air France, showed that passenger traffic from North America to Europe increased faster over the year than the inverse.
Outbound passenger traffic between May and August from North America was 2.8 times higher than between January and April. But passenger traffic from Europe to North America during the summer was just under double the level between January and April.
US reservations for Europe are closer to pre-coronavirus pandemic levels. Olivier Ponti, vice president of insights at travel industry data firm ForwardKeys, said that as of mid-October, bookings for flights from the US to Europe were 6% below 2019 levels, while bookings from Europe to Europe were 6% below 2019 levels. the US remained 19% lower. .
Norwegian start-up Norse Atlantic, which flew the first of its services between London and New York in August, said it had experienced “especially strong” demand from the US to London, a trend attributed to the weak pound. Shai Weiss, head of Virgin Atlantic, said UK holidays were essentially “for sale” to American tourists.
“If I were someone in New York and I wanted to buy a Hermes bag, I would come to London,” he said.
At American Airlines, transatlantic travel generated $1.9 billion in revenue in the third quarter, up 19% compared to the same period three years earlier. A larger share of the airline’s flights are domestic than before the pandemic, commercial director Vasu Raja said, but there is still “clearly a demand. . . for the long-distance product”.
Delta’s international revenue increased 12% in the third quarter, even with a smaller network, driven by leisure travel to Italy, Spain and Greece.
Flight capability is also increasing. Delta Air Lines has been slower than US rivals to restore seats and flights to their schedule following pandemic cuts. However, last week, Delta President Glen Hauenstein said that Europe was the first region where its seating capacity on routes in October exceeded 2019 levels – including for US domestic travel.
Next summer, United and Delta plan to increase the number of seats they offer on flights to Europe, according to aviation data firm OAG. United, which has historically operated more international flights, plans to expand by 29% compared to 2019. Delta’s capacity is scheduled to increase by 5%.
Would-be tourists have missed years of traveling across Europe, Hauenstein said, and the result is “robust demand” that Delta expects to last through next summer.
“People run out of time, including me,” he said. “We thought, ‘Wow, how many years do I have left to do this?’ So I think we have a very good scenario there.”
Washington DC resident Vince Ryan was one of the travelers looking forward to visiting Europe this past summer. He paid $980 to fly to Istanbul — more than he was used to paying on his pre-pandemic annual trips — to get rid of the restlessness of weeks in the sun and exploring ruins. It didn’t hurt that when he arrived, $1 could buy 17 Turkish Lira, whereas six months earlier it would have been just FP13.
But while airline executives expect transatlantic travel to remain robust, Ryan’s experience suggests there is a limit to the desire to travel. He considered flying to Rome over the Christmas break before abandoning the plan in the face of expensive fares.
“I’m looking for economy class flights for $1,300 to $1,700,” he said. “I don’t go there about it.”
