FlightHub CEO sees early warnings signs of softer travel demand

MONTREAL — Demand for air journey could also be levelling off after hovering to pre-pandemic ranges over the summer time, says FlightHub’s CEO.

Christopher Cave mentioned airline ticket gross sales dropped from September to October, after they usually rise forward of the vacation season.

“There’s a bit of hysteria round ticket costs. There’s a bit of hysteria across the total economic system, rates of interest and so forth. So we’ve got to anticipate the potential softening of the journey market over the subsequent 12 months,” Cave mentioned in a telephone interview.

Gross sales at U.S. journey businesses final month fell 5 per cent beneath ranges from September and two per cent from a 12 months earlier, in response to information from Airways Reporting Corp., which processes tickets for businesses.

Nonetheless, Air Canada CEO Michael Rousseau mentioned final month that demand stays “very secure,” with advance ticket gross sales in its third quarter up 55 per cent year-over-year.

The journey sector got here roaring again this 12 months, with seat capability almost on par with 2019 ranges, in response to aviation information agency Cirium. Although demand from enterprise travellers stays properly beneath that of pre-pandemic days.

TD Cowen analyst Helane Becker mentioned bookings are up for Thanksgiving, Christmas and New 12 months’s however worse than anticipated for off-peak durations as journey plans adapt to strained purse strings.

“It seems to us that we’re seeing a reversion to the imply as journey patterns begin to mirror the present actuality,” Becker mentioned in an Oct. 27 notice.

She cited elevated prices on all the pieces from hire and mortgages to meals, gasoline and scholar loans.

In the meantime, the pliability allowed by at-home or hybrid work in the course of the COVID-19 pandemic and its speedy aftermath has decreased in current quarters.

“4 is the brand new three,” Becker mentioned, referring to the variety of days many employees are anticipated within the workplace, “and faculties are again in session full time. It isn’t simple to get away for lengthy weekends anymore.”

For airways, greater wages, gasoline costs and rates of interest are weighing on the underside line.

“The mounted prices are there, however the income isn’t,” she mentioned.

This report by The Canadian Press was first revealed Nov. 16, 2023.

Firms on this story: (TSX:AC)

Christopher Reynolds, The Canadian Press

<!– Picture: 20231116111156-65564a3d209d7f1211fc4217jpeg.jpg, Caption:

The CEO of on-line journey company FlightHub says demand for air journey could also be levelling off after hovering to pre-pandemic ranges over the summer time. Travellers make their manner by Pearson Worldwide Airport in Toronto Monday, Nov. 14, 2022. THE CANADIAN PRESS/Cole Burston


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