US Airways Sees ‘Nice Uptick’ In Leisure Travel

June 17, 2009

US leisure air travel bookings have increased in recent weeks, though demand for more lucrative business travel remains down, US Airways chief executive Doug Parker said on Tuesday.

“We have seen a nice uptick in leisure demand, leisure bookings, in the last couple of weeks which we believe is encouraging,” Parker told reporters on the sidelines of the National Summit in Detroit.

“It would be more encouraging if it were business,” he added. “There is something going on here that is different than we had seen in the last few months.”

Parker also said that the increase in leisure bookings came without added incentives on tickets. He cautioned that it had been only a couple of weeks of bookings, but that the increase in the volume of bookings was significant.

The US airline industry has been battered severely by high fuel prices and weak travel demand. Although fuel prices are down from record highs reached nearly a year ago, the cost of oil, which influences fuel prices, has crept back above USD$70 a barrel.

Meanwhile, the recession has hammered demand for both leisure and business travel and airlines have responded by cutting capacity and jobs. US Airways said last week that it expects further capacity cuts in its trans-Atlantic flying.

“The industry’s revenue shortfall this year has been due to the drop off in business demand,” Parker said. “It really happened in the early part of the year, January and February, and hasn’t come back.”

Parker said there is still little visibility on when business travel might return.

“I know it is driven by the economy,” he said of business travel. “I know there are some positive indications about the economy and I know that when the economy rebounds that business travel will come back, so those things I know. I just don’t know when that is going to happen.”

Parker said the airline industry has done a good job in cutting capacity to meet the reduced demand, but added that more would “probably” be required if the economy stays where it is for an extended period of time.

(Reuters)