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Investing.com — Demand for travel could pick up despite rising airline ticket prices after the U.S. abandoned its rule that international travelers entering this country have a negative Covid-19 test before they board their flight.
United Airlines Holdings Inc (NASDAQ:UAL) has said searches for international travel jumped 7% in the 72 hours since the U.S. announced that decision. There were 2.4 million searches over the weekend. United shares fell 2% on Tuesday.
Even domestic travel, which was not subject to the pre-boarding testing rule, is picking up. Domestic flight bookings in May led to $8.3 billion in online spending, according to data from Adobe, that’s up 6.2% from the prior month. Compared to 2019, spending and bookings remain elevated, Adobe said. So far this year, people have spent $37 billion online for domestic flights, nearly double what was spent in the first five months of 2021. For May, online spending was up 29% compared to May 2019, and bookings rose 4.4%.
Higher prices may help explain why people are spending more. Prices for domestic flights continue to rise in May, up 30% over 2019 levels, Adobe said, and 6.2% higher than April. Adobe said it was the fourth consecutive month where prices have risen over pre-pandemic levels.
Airlines continue to struggle with passenger load and labor issues, however. Ryanair Holdings PLC ADR (NASDAQ:RYAAY) in Europe faces a strike by workers in the middle of summer travel season. Cabin crew in the carrier’s Spain operation have authorized six days of strikes in late June and the first two days of July as they push for improved working conditions.
In the U.S., carriers have been trimming summer flight schedules in the hope that it will help coordinate staffing.
Separately, Spirit Airlines Inc (NYSE:SAVE) said Tuesday it would decide between two competing bids from Frontier Group Holdings Inc (NASDAQ:ULCC) and JetBlue Airways Corp (NASDAQ:JBLU) by the end of this month, when shareholders are scheduled to vote on the Frontier offer after a delayed meeting. A statement from Spirit says it continues to be “bound by” the Frontier offer, which it considers to be capable of being closed and financially favorable to Spirit shareholders.
Shares of Spirit rose 2%, while Frontier shares fell 1% and JetBlue fell 2%.
