November 25, 2020

At Thanksgiving, Americans Wonder: Fly or Don’t Fly?

by Jharonne Martis.

COVID-19 has changed the travel industry drastically this year. Although the TSA has reported an increase in travelers since March, passenger levels are significant below previous years. This year, U.S. consumers are very much concerned about COVID-19 and the bulk of them will be staying home for Thanksgiving, Refinitiv discovered in a survey collaboration with Maru/Blue Public Opinion, a panel and data service insight firm.

The survey revealed that 78% of U.S. consumers will be staying in their residences this Thanksgiving. Of those, 60% will stay at home with a loved one, or people they live with, specifically due to the risk of contracting the coronavirus. (Exhibit 1)

On the other hand, 19% of respondents plan to travel during Thanksgiving and are aware there is a health risk by travelling and being with others.

Exhibit 1: How U.S. Consumers Intend to Celebrate Thanksgiving

 

Source: Maru/Blue Public Opinion Survey

In order to attract travelers during COVID times, various airlines including Jet Blue and United Airlines are giving passengers do-it-yourself tests. Still, a sea of red continues to loom over airlines during the busy November travel month, as potential customers are reluctant to fly. (Exhibit 2).

Exhibit 2: StarMine Combined Credit Risk Model Scores for Airline Industry

Source: Refinitiv Eikon

It is evident that analysts have become more bearish on these stocks as the Analyst Revisions Model score has remained down due to fewer-than-usual Thanksgiving travelers. United Airlines scores a 2 out of a possible score of 100, placing it in the bottom decile. Its score plunged to 2 from 84 since the pandemic started (Exhibit 3). Other airlines are also in the bottom quartile, suggesting that analysts are likely to continue revising earnings estimates downward for these companies.

Exhibit 3: StarMine Analyst Revisions Model for United Airlines.

Source: Refinitiv/Eikon

Regardless of Thanksgiving travel plans, 75% of survey respondents are concerned they could catch COVID-19.This suggests that the travel industry will start to heal once a vaccine becomes available.

Exhibit 4: How concerned are you that you could catch the COVID-19 virus?

Source: Maru/Blue Public Opinion Survey

The findings and detailed tables can be found here: https://www.marublue.com/american-polls.

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