If 2021 was about flying again, 2022 is about higher fares & packed flights

• TAC Analysis details its 2022 forecast in two parts, beginning with an examination of how 2021 unfolded.
• Domestic U.S. load factors returned to 2019 levels during the summer season, filling the available capacity to the brim.
• As demand continues to return without sufficient capacity to keep pace, fares have already returned to 2019 levels, a trend expected to continue in 2022.

The story of the post-pandemic recovery of air travel in the United States is not a new one. The recovery has been on a positive trajectory since mid-April 2020, reaching 82% of 2019 traffic as of November 2021, following lows of 3% just 19 months prior.

Indeed, our 2021 forecast, published 13 months ago, suggested a stronger 2021 recovery than expected by many in the industry. That optimistic forecast, too, proved insufficiently optimistic as it anticipated a December 31st recovery to 75% of 2019 passengers, a number exceeded by July of 2021.

Americans want to travel and are increasingly willing to do so as restrictions fall. While the attention through 2020 and 2021 has been focused on the return of the passenger, 2022 will be marked by the return of seats in which those passengers can travel. 

COVID split traffic and capacity with empty aircraft, fares became the elastic band stretched to keep the two connected. These low fares ultimately worked to stimulate demand. Traffic came back, slow, but steadily, reconnecting traffic with capacity.

Related: A very real pilot shortage threatens to upend the U.S. airline recovery

Now, 2022 faces the opposite problem. In their reduced state, the U.S. airlines lack sufficient capacity to handle the return of traffic, ultimately forcing the elastic band of fares to stretch the other way to accommodate. 

This latest TAC Analysis is the first of two parts that lays out the case for our forecast for the United States air travel recovery in 2022, highlighting new challenges on the horizon. The complex industry we call aviation will once again be faced with limits to growth beyond simply convincing passengers to fly again.