Airline Sector Will Recover in 3 to 7 Years: Analyst

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Helane Becker — managing director and senior research analyst covering airlines, air freight and aircraft leasing at Cowen — joins Yahoo Finance Live to discuss her firm’s weekly airline fare tracker, as well as her outlook for the airline industry in 2021 and beyond.

Video Transcript

JULIE HYMAN: There are a lot of hopes for a lot of rebounds this year. One of them, perhaps, is in the airline industry. Will people in larger numbers get back to the skies? To talk about that, we’re joined by Helane Becker. She is Cowen’s Senior Analyst. She covers the airlines.

Helane, it’s great to see you. And you guys just started compiling some data on prices across the board for the airlines, which are really interesting and mostly stagnant, right? So what are you seeing there, and what is that telling you about the trajectory for the airlines?

It’s good to see you, too, and thanks again for having me. So what we see is prices are kind of flat, but at a lower level than where they were in the past bunch of years, you know, say, 2017 to 2019, primarily because people who travel generally have to travel. And in fact, we kind of think that leisure travel is about 90% of the way back to where it was pre-pandemic. It’s the business traffic that’s still down 85% in international that’s virtually nonexistent. The only people traveling internationally are those who have to. And so those fares haven’t really come down.

But airlines have found that leisure travelers, either returning home or you know, going to our national parks, or doing things to outdoor, beaches and so on, will travel. And so they’ve lowered fares to stimulate demand. And then fares will stay here, we think, at these lower levels for quite a while, I guess until we get back to some level of cash flow positive.