New variants of the COVID-19 virus brought turbulence to what was otherwise a solid year of recovery in 2021 and the year ahead will probably bring more of the same, said Bill Swelbar, chief industry analyst for the Swelbar-Zhong Consultancy.
Swelbar was the featured guest Wednesday on the final “Survival & Revival” call hosted by the Airport Restaurant and Retail Association (ARRA) in 2021. During his second visit to the call this year, he pointed out that despite solid resurgence at many airports, the pandemic still continues wreaking havoc. That will likely continue keeping some people out of the office and, by extension, the skies.
“We can expect through 2022 it’s going to be choppy. There’s no one clear path here. In order for the domestic business to come back to some semblance of 2019 for all, we need business travel to come back,” said Swelbar. “As we get variants and mutations every day, when that stuff hits the headlines all we see is businesses pulling back on wanting to bring people back to the office, and that means [pulling back on] putting people on airplanes.”
The return of international travel is also hotly anticipated industry wide. While it may not boost the market as much as some would hope, Swelbar said it may help to stabilize the currently unpredictable demand. And he does expect some travelers to switch plans that have largely involved domestic travel this year toward international destinations.
“I don’t think we can underestimate just how important the international component is. Some 15% of people flying on a domestic flight are destined for or coming back from an international journey,” he said. “Once international travel begins to come back … I believe there’s going to be some substitutions.”
Swelbar also addressed supply chain and labor issues that continue plaguing the industry, indicating especially that such issues are vital for getting back to normal, but less controllable than they once were.
“Wage rates used to be considered a controllable cost and now I think for everybody… it’s going to be less controllable than we would like,” he said. “Finding the right workforce is what’s going to get us back to 2019 levels,” he added.
Toward the end of the call, Swelbar also talked about the impact COVID-19 might have on air service at smaller airports. He suggested that the dramatic shifts that have occurred over the past two years may affect travelers’ needs for smaller-scale, more local service.
“From day one of this pandemic, I have believed that airlines will likely be a little smaller than they were, and there will be less community service. I do not believe every single hub that was in place in 2019 will be in place in 2025,” he said. “Small community air service is going to change. Airlines without 50-seat jets are not going to be able to serve all markets.
“Some airports are just going to have to repurpose themselves,” he went on. “That’s not a bad thing.”
In other news, ARRA Executive Director Andrew Weddig announced that the organization would retire its weekly “Survival & Revival” call after 69 episodes. It will be replaced next year, he says, by a new series of calls that will feature “a wider breadth of topics, new experts, and even a new, more interactive format.”