Despite steep airfare increases, a challenging economic outlook, and the possibility of airport congestion in Europe, American online searches for flights to Europe are surging. This travel boom is resulting in record profit margins for some U.S. airlines, as they increase their transatlantic capacity to capitalize on Americans’ strong desire to travel to Europe.
The positive outlook of U.S. airlines towards travel spending can be attributed to the continued strong demand for transatlantic travel by Americans, despite the challenging economic climate marked by rising interest rates, high inflation, increasing job losses, and a global banking crisis.
According to industry executives, the easing of pandemic-related travel restrictions in Europe is boosting travel confidence among people who were previously worried about getting stranded abroad if they contracted the virus. The availability of more flexible work arrangements and a strong U.S. dollar are also emboldening travelers to take transatlantic trips.
The list of European cities that Americans plan to visit this spring is continuously growing.
Hopper’s March data reveals that 37% of online searches made by U.S.-based customers for international travel this spring are for flights to Europe, which marks a 9% surge from the same period in 2019.
Kayak, a travel website, has reported that online searches for travel to Europe this summer have surged by 77% compared to last year.
Palumbi, a 26-year-old meteorologist, plans to work remotely while traveling to Portugal, Southern France, and Montenegro. “It’s been impossible to open up social media over the past couple of years without seeing at least a few friends posting from Europe,” she said.
According to Hayley Berg, the lead economist at Hopper, there is still significant untapped travel demand for Europe, even after a busy summer season last year. As a result, Europe has become the top travel destination for Americans from late May through the fall, which is a positive development for the region’s travel industry. This industry has been struggling with cash-strapped domestic travelers seeking cheaper vacations and lower-than-expected bookings from high-spending Chinese travelers.
Despite high travel demand last summer, carriers were unable to fully capitalize on it due to widespread labor disputes in Europe and a passenger cap at Amsterdam’s Schiphol Airport. These issues led to flight cancellations and service reductions, which negatively impacted Delta’s earnings, particularly in Amsterdam.
Schiphol Airport, which is one of Europe’s busiest airports, plans to limit passenger numbers again this summer, which could result in further disruptions for travelers.
Aviation analytics company, Cirium, reports that American Airlines (AAL.O), Delta Air Lines (DAL.N), and United Airlines (UAL.O) – the three major U.S. carriers – have increased their transatlantic capacity by 22% this year.
Executives from U.S. airlines have cautioned that prices are likely to continue rising.
“I would urge you to tell all your neighbors if they’re trying to go to Rome this summer, they better book early,” United Chief Commercial Officer Andrew Nocella said.
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