U.S. Air Travel in 2020 — A Supply Side Problem?
By: Pat Canny
Tags: Travel, Covid 19, Traveling, Air Travel

I’ve been tracking the air travel data provided by the TSA for a few months now. The data is fairly simple: every day, the TSA posts how many total travelers went through U.S. checkpoints in 2020 vs the same weekday in 2019 (some weekdays result in more travel than others, so this makes perfect sense).

I’ve noticed something a bit strange since the beginning of July, which is when air travel began to “level off” after a fairly rapid recovery since hitting rock bottom in April. Here’s a chart showing the smoothed (seven day moving median) ratio of 2020 travel data vs. 2019 (data is through 16 December 2020; I wrote this post on 18 December 2020).

The y-axis is the ratio of total 2020 travelers (as measured by TSA checkpoint check-in) on a given day to the same weekday in 2019. Travel bottomed out in mid-April, and fairly quickly “rebounded” to about 30% (compared to 2019) and held steady for a few months. There was a sudden “spike” around Labor Day, though things settled back down for a while.

For the most part, the trend in air travel in 2020 appears to match that of 2019, based on the fairly constant ratio for months on end. It’s not exact (there are certainly some obvious dips as restrictions have come into effect, especially recently). However, in general, the number of travelers in 2020 tend to go up and down at roughly the same time as the same weekday in 2019.

When talking about a ratio of travelers on a given day in 2019 vs. 2020, there appears to be a “ceiling” at around 40%.

Two observations:

Demand appears to be fairly resilient, and the airlines appear to be matching their supply fairly well. If this were not the case (and demand was truly depressed), then we would expect to see a weaker correlation between the 2019 and 2020 trends (i.e. a lot more “up and down” in the travel ratio compared to last year) The “ceiling” is likely due to restrictions put in place by airlines (e.g. leaving an empty middle seat) due to the pandemic. This is to be expected. In addition, international flights (which represent 20% of total flights in most years) have been largely cut off.

On the “supply side” (the airlines), there are fixed costs in deploying an additional aircraft (crew costs, fuel, airport fees, maintenance, etc.) which factor in to the number of flights offered. This likely has a “non-linear” effect on the total capacity, as offering an additional flight would then introduce a large “step” in new travelers on that day. This may explain some of the ups and downs, but I’m surprised how steady the ratio is overall.

On the “demand side” (the traveling public), it appears that travelers in 2020 are generally behaving fairly similarly to travelers in 2019. This is encouraging, as it would indicate a general willingness to fly. Of course, there are additional future considerations, such as fewer business trips as a result of (fairly widespread) remote work. However, as I have experienced in working with my customers and Sales associates: it is really hard to build relationships over Microsoft Teams and Zoom. I have a sense we will see a return in business travel. My rough guess would be by the end of 2021 about 50–60% of business travel will return.

If the 2020 data keeps following the 2019 data (which is not a given, and recent days are showing more of a dip in travel as people finally take the pandemic more seriously), one could surmise that, once airlines stop leaving empty seats in between passengers and international flights become available, demand should bounce back fairly quickly, but it will still take years before it returns to the pre-pandemic levels.

This is just a theory, of course. But at least the data back it up.

A brief final “aside”: around Thanksgiving, many in the media expressed deep concern about travelers ignoring recommendations. I heard a few outlets mention that “travel is about 40% of last year”. That was 100% true, but as I said above: the ratio had been hovering around 40% for weeks. I don’t recall similar outcries during the spike around Labor Day, which was far more significant. I just wish those in the media had bothered to mention that, let alone the recent dips as people started flying less.

All nerdy analysis aside: Stay safe, and stay home. Let’s hope for a better 2021, folks.