Domestic travel demand started to recover during Spring Break in April. However, it seems that it already peaked in July. Air travel spending in the US slowed down around mid-July amid the rising Delta variant cases in the country. According to the July consumer credit card data by JPMorgan Chase, air travel dropped by 20% in late July.
JPMorgan Chase economist Jesse Edgerton wrote that “Airline spending has fallen almost 20 percent from a recent peak in mid-July”. He added that it was a “larger decline than during the severe winter COVID wave, when spending was at much lower levels”.
The JPMorgan Chase numbers coincide with federal data as the number of people who passed US airports dropped by 4% during the week of July 19 compared to its previous week. According to the Transportation Security Administration, it’s the first weekly drop since April.
Short-Lived Drag on US Air Travel Spending?
However, despite the drop in air travel spending, Edgerton’s report predicts that consumer spending will return soon. The US appears to mirror what the UK is experiencing as it dealt with the Delta variant. Edgerton said that “My guess is that the wave will end in a month or two”. He added that “this will end up looking like a short lived drag on spending and economic activity”.
100,000 US Daily Cases
Bank of America said that “the 2-year growth rate of air travel peaked four weeks ago and has taken a turn lower”. Bank of America added that it possibly reflects “risks from the Delta variant”
The US is now dealing with another surge. It is now logging 100,000 cases daily mainly because of the delta variant. This reignited officials to impose stricter safety protocols. Airline stocks in July were also affected because of the rise in delta variant cases.
Though the US has a high vaccination rate compared to other countries, some states lag in terms of vaccination rates. States such as Florida and Texas have been greatly affected by the recent surge.
