Routes Reconnected: Route development: “traffic will surge in summer 2021 nearing 2019 levels”

Route development “traffic will surge in summer 2021 nearing 2019 levels” (4)

In this session, which started at 0840, David Stroud outlined what he thinks route development in 2021 will look like.  

In this article, we’ve highlighted three parts of what Stroud discussed.

Route development: “traffic surging in summer 2021 nearly 2019 levels”

Route development “traffic will surge in summer 2021 nearing 2019 levels” (2)

In 2021, key factors driving passenger demand will be flight availability and economic health, both personally and corporately.  Personal economic health will restrain airfare rises.

Demand will be built on trust and confidence arising from testing and vaccination programmes, which will replace the need for quarantining and will open borders.

Stroud believes that the order of demand recovery will be as above. “Like most commentators, I think traffic will recover domestically first, then internationally, with leisure, vacation, and VFR being the dominant engines of traffic demand.”

“Given how important business travel is for airlines with yields and financial stability to many, many routes around the world, it’s unfortunate that business travel will recover the slowest.” 

Clearly, it’s essential that business travel must be closely watched: how fast will it recover?  It is expected that physical events, conferences, and exhibitions will restart and be the catalyst for the reemergence of business demand.

For the foreseeable future, aviation will be dominated by leisure, with “vacations more important than ever in driving demand.”  This will lead to a “traffic surging in summer 2021, nearly 2019 levels.”

Airlines, airports, and communities must work “more closely than ever”

Route development “traffic will surge in summer 2021 nearing 2019 levels” (3)

“Data and the traffic trends that we all relied on going into this year have been heavily disturbed by coronavirus.  We’re now looking at historical information as our guidebook and trusting that that’s going to reflect the future.”

The graphic on the left is trying to capture two things, Stroud said. “The first is that if ever there was a need to improve collaboration and communication in looking at business cases and building connectivity, this is the moment.”   Airlines, airports, and communities must work “more closely than ever” and in partnership in creating business cases for new routes. The airport-airport relationship will “bond more closely.”

“The detail of those business cases will be fundamentally built on two to three key pieces of information: trust and confidence; demand recovery; and new incentives.”

In terms of demand recovery, what real evidence is there in the data and information that’s captured? This goes to the heart of everything.

“We’re also entering a new era of incentives and support,” Stroud stressed.  He specified especially around regional governments and authorities and perhaps even national governments.  For example, more EAS/PSO, greater route development funds, or more cost mitigation incentives.

Such support, he insists, will be more important than ever to “enable the economic impact these new services will bring.”

Route development: risk-sharing opportunities much more important 

Route development “traffic will surge in summer 2021 nearing 2019 levels”

“What airlines say is hugely important,” Stroud said. “Airports, communities, and authorities must have more conversations with airlines and have a greater understanding of what they need from them.”

The points highlighted in the figure above are some of the findings from ASM’s surveys with airlines.  Further consolidation, for example, is highly likely, producing fewer but stronger carriers. Normally, of course, less capacity would mean higher pricing, but not now. 

Moreover, Stroud stressed that airlines don’t really see the risk to airports.  This means it’s very important that one part of the industry should not feel especially vulnerable while it believes that another is being protected.

Stroud said that airlines are increasingly after risk-sharing opportunities from airports and city partners, especially in the form of revenue guarantees.  “If these things are constructed in the right manner, they can be a win-win for all parties.”  Going forward, he thinks these will become much more normal. 

Naturally, airlines “will keep the pressure on to reduce their costs.” They’ll expect greater efficiency at airports and “will require airports to really ask how they can minimise costs and risk attached with building connectivity.”  Like Michael O’Leary recently said: “just pass on the savings.”


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