Slowly But Not Surely: Airline Leisure Travelers Coming Back, But Not Business Travelers. International Still Crushed

Enormous uncertainty about the structural change in the lucrative business travel segment.  

By Wolf Richter for WOLF STREET.

In preparation for summer vacation season in the US, United Airlines announced today that in July it would add 400 more flights, compared to its June schedule, which would bring its schedule for domestic flights to 80% of July 2019. The additions would include new routes to tourist destinations, Bozeman, Orange County, Raleigh, and Yellowstone/Cody.

The lucrative international and business travel segments are a different matter. In terms of its international schedule, United only said that it would reopen some routes to European destinations. Overall international air travel has remained crushed. And Delta, which is heavily focused on business and international travel has spoken about both of them – more in a moment.

International revenue passenger miles by US airlines in February, the latest data available from the Bureau of Transportation Statistics, was still down 80% from February 2019:

But leisure travel is picking up. On Sunday, 14 months into the airline crisis, 1.85 million air passengers passed through TSA checkpoints to enter the security zones of US airports, the highest since March 2020, but still down 29% from Sunday in the same week in 2019. The seven-day moving average through Sunday was down 34.5% from the same week in 2019. The peaks and valleys in the chart represent calendar shifts of holidays:

Business travel, the most lucrative end for the airlines that subsidizes low-cost leisure fares, is facing enormous uncertainty. The estimates of what will happen to it are all over the place. Everyone agrees that some of it will come back. But many people in Corporate America believe that some of it will never come back, having been replaced by video conferencing, a permanent structural shift that the Pandemic has shown to work for many types of meetings, much like many types of retailers have seen their brick-and-mortar retailers business get crushed further year after year by ecommerce.

Delta Air Lines has positioned itself as higher-end airline catering to business travelers, particularly on international routes, and charging higher prices. It has been hit harder than other airlines during the Pandemic. Its net loss of $12.4 billion in 2020 was the highest in the industry, compared to American Airlines’ net loss of $8.9 billion and United Airlines’ net loss of $7.1 billion. Southwest, which is focused on leisure travel and has only a few international routes, lost $3 billion in 2020.

Delta CEO Ed Bastian told the Wall Street Journal last week in terms of the US domestic business travel segment, “We’re only right now 25% to 30% of where we should be. I think by the end of the year that will be at least twice that.” So by the end of 2021, domestic business travel would be about 50% or 60% of where it “should be?”

“International business is going to probably be another year from now,” he said – meaning down by about 50% by the end of 2022?

Business travelers were the cash cows for airlines. Back in the day, business travelers were buying tickets with expense accounts, and price was less of an issue or no issue, but practical considerations, service, and comfort dominated, and they were willing to pay for it. That segment has collapsed, particularly on the super-lucrative international routes. And airlines have cut capacity drastically on business-travel routes.

The entire industry is now trying to guess what portion of business travel will come back, and what portion will never come back. Estimates range all over the place, and uncertainty prevails.

But leisure travelers sticking to US domestic routes this summer, confronted with still reduced capacity, are going to face crowded and congested conditions, Ed Bastian said. And he added that it won’t be till 2022 when the leisure masses will be comfortable flying to Europe.

Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

Drone footage of roofs with aluminum and steel shingles. Take in the details of each installation from a bird’s eye view.

These roofs are from our brands: Classic Metal Roofing, Kassel & Irons, and Green American Home. For more information, give us a call!

  76 comments for “Slowly But Not Surely: Airline Leisure Travelers Coming Back, But Not Business Travelers. International Still Crushed

  1. MonkeyBusiness says:

    How soon before airlines lift the mask mandate? If they do it too soon, we’ll see another plunge in passenger numbers later this year I think.

    • Javert Chip says:

      Even before Covid and given the cramped seating (even in 1st), I seriously considered wearing a mask (Japanese-like) to protect myself from highly irresponsible fellow passengers who coughed & hacked their way thru a flight without ever covering their mouth. I never actually wore a mask because…well…I’m French, not Japanese.

      I’m a retired geezer (2-million-miler on American; close to a million on each: Delta, United, British Air).

      My 1st business trip was fantastic; the rest, not so much.

      I’m now retired and only travel for “pleasure”. Between what TSA, the airports & the airlines inflict on their “customers”, I’m actually amazed that, over the years, the sheer brutality of the experience hasn’t significantly eliminated this business ritual.

      Having said that, if you’re doing a sizable (to the corporation, not to you) deal, there will never be a replacement for at least some eye-to-eye contact.

      • LeanFIREQueen says:

        > I’m a retired geezer (2-million-miler on American; close to a million on each: Delta, United, British Air).
        > My 1st business trip was fantastic; the rest, not so much.

        The key to traveling well is avoiding the big 3 US airlines.
        Take Emirates instead, you will understand the meaning of hospitality.

    • whatever says:

      I disagree. There will be less travel with a mask mandate. Travel is miserable enough with mask nazis terrorizing two year olds.

      And if you’re vaccinated, what do you care about others are or aren’t and why do you care about mask mandates? Are you a vaccine denier who think vaccines don’t work?

      • Wolf Richter says:

        whatever,

        If the vaccine is 90% effective, that’s an awesome vaccine. That’s kind of what we have. But no vaccine is 100% effective. So you don’t want to get reckless and be stupid just because you’ve been vaccinated.

        • Michael Gorback says:

          Masks don’t protect the wearer. They protect OTHER people from the wearer. My mask protects you from me, and vice versa.

          The person who doesn’t wear a mask is not causing a risk to themselves but to others. IMO the jury is still out on mask effectiveness although preliminary info from Israel suggests that vaccinated people are far less likely to spread the infection. Vaccination might be a mask equivalent.

          Governor Abbott of Texas discontinued the mask mandate and other covid precautions March 2. I was opposed to this. Prior to the relaxation of the mandates Texas was experiencing steady decreases in covid. Why stop what seemed to be working?

          In my area Texans and Texan businesses continued to employ masks to a considerable extent so dropping the mandate didn’t seem to have much behavioral impact at first. Covid continued to drop. Gradually I’ve seen more people take a lax approach toward masks. Covid continues to drop.

          On Sunday Abbott announced that there were zero Covid deaths that day, the fewest Covid cases in over 13 months, the lowest 7-day Covid positivity rate ever, and the lowest Covid hospitalizations in 11 months.

          The Texas vaccination rate is at about 50% of eligible people.

          Then he took a victory lap and congratulated Texans for doing a great job. But what did we do?

          We didn’t get anywhere near enough vaccination done to approach herd immunity.

          People seem to be confused about masks, especially outdoors. We’re watching each other for cues. It’s like “That guy has his windshield wipers on. Maybe I should too but I can see pretty well”.

          I have no idea how to interpret this. The closest I can get is that we had a lot more asymptomatic covid than we thought and herd immunity is higher than we thought.

          I’ve been in the San Francisco area the past few days. It’s the same inconsistency. You walk up to an outdoor dining area wearing a mask. Then you walk about 20 feet to your table and remove your mask. All the diners have no masks.

          Then the server comes out wearing a mask. HELLO? DID ANYONE NOTICE WE’RE SITTING NEXT TO THE BAY IN A BREEZE?

          Same thing in Napa.

          I was stunned when I went to the DMV earlier this month. The staff were wearing masks and we had to wear masks. Did they not get the Governor’s memo or is the Texas DMV run by New York now?

        • Phil says:

          N95 masks certainly protect the wearer, and they are easy enough to find on the internet now.

        • MonkeyBusiness says:

          I think it’s now generally accepted that our vaccines still won’t prevent the spread of the virus?

          The definition of effective clearly has changed from the days of the polio vaccine.

        • Wolf Richter says:

          Look at the infection numbers, such as in California, Texas, etc. Way Way down. In San Francisco, super low (over 60% of the people are vaccinated). That’s the vaccines in operation. They work well, and you can see it in the numbers. But they’re not 100% because some people cannot build up immunity. But if enough people are vaccinated, the virus loses its ability to multiply and recedes into the background. The problem is, there is now resistance to getting vaccinated, and vaccination rates will not be 100%. Polio vaccination rates with school-age children were nearly 100% back in the day.

        • MonkeyBusiness says:

          I wasn’t talking about that. Because this is a non sterilizing vaccine, it might work like antibiotics i.e. the virus may actually get more virulent down the line because of its fight with this vaccine.

          Perhaps I should have said that the view is more widely accepted among the scientific community.

          Remember, antibiotics resistance is not a fringe theory.

        • Phil says:

          Monkeybusiness your information is 100% wrong- absolutely a fringe theory. There is a growing body of evidence that the current vaccines impede the transmission of covid19 by vaccinated people. I don’t know of ANY legit scientists who would support your claim.

      • Javert Chip says:

        whatever

        Wolf’s caveat is important, but what counts as “reckless and…stupid”? I’m in basic agreement that given FL’s demonstrated experience vs lock-down masked-up states (CA, NY), most masks don’t appear to have much (any?) impact on transmitting or receiving Covid (the virus appears to be too small to be blocked by most cheap masks).

        Sixteen months ago, it was appropriate for doctors to give us their “best guess” that mask-wearing would substantially control Covid transmission – it was about the only thing they could do.

        Pathetically, 16 months later, we still have no science-based guidance on mask-wearing. Our expensive US government’s so-called “scientists” (Dr Fauci, et al) have been so tied up in their political underwear that even now, no clear, documented, credible scientific basis has ben provided to support statements on mask-wearing. As of now, there simply is no science on the subject.

        • Wolf Richter says:

          Javert Chip,

          I really hate getting into these endless arguments when people need to just look up the data. Then there is nothing to argue about.

          So I just looked it up again, 7-day moving average, daily new infections, per 1 million population:

          FL: 142
          TX: 71
          CA: 35
          San Francisco: 23

          Florida’s daily infection rate even now, even with vaccines, is 6 times that of SF and 4 times that of California per 1 million population. So you decide if appropriate mask policies are working.

        • Javert Chip says:

          Wolf

          You know I research up the numbers, and I’ll stipulate your numbers are correct (actually, I double-checked them).

          However, I didn’t even mention numbers – my point was THERE IS NO SCIENCE BEHIND MASK GUIDANCE – the guidance (from WHO, the CDC, the Whitehouse, Dr Fauci…) changes week by week depending upon POLITICS (not science).

          If I was going to argue numbers with you (which I’m very reluctant to do), I might point out that cherry-picking current numbers wouldn’t look so good compared to the last year, during which FL has been open and CA locked down.

        • Wolf Richter says:

          So now you’re doing some cherry-picking. People were dying in California and New York of Covid before anyone even knew what was going on. Covid came to CA from China; it came to NY from Italy.

          At the time, the CDC told people NOT to wear a mask. That’s where your last sentence collapses.

          Most other states were spared during the first few weeks/months. It took a while to spread to FL and TX and even longer to spread deep inland. But when it did, it sure did.

          Even in CA, there were huge differences. Most of the cases were in Southern CA — the L.A. area. It wreaked havoc there even before the lockdowns and long before masks.

          In San Francisco, the first city to lock down in the US, the case numbers in the following months were among the lowest of major cities thanks to mask requirements and the early lockdown that prevented the spread. This is a cause and effect situation. Lots of lives were saved in SF.

        • Lisa_Hooker says:

          It is obvious from the numbers that Wolf showed that covid infections result where there is a high propensity for hurricanes. When was the last time a hurricane hit SF? While TX and FL are hit a lot. Absolute undeniable proof right there. Confirmation? Causation? Coincidence? How did we survive 4 waves of influenza from 1918 to 1920? Face masks, washing, social distancing.

  2. Micheal Engel says:

    1) Takeoff or stall altitude.
    2) The key is SPX Apr 16 close, a dividing line between several triangles up and down.
    3) Last Fri high is either LPSY that will send the markets down, or part of an accumulation that will lead to 4,400.
    4) From Mar 25 low SPX was up 337.81 pt. This vertical rise is SPX pole.
    Options :
    5) Takeoff : add the pole to May 12 low : 337.81 + 4,056.88 ==> 4,400.
    6) Landing : new supply bars will send SPX to Mar 4/5 fractal zone.
    7) The uptrend is weak.

  3. MarketMissing says:

    Travel was getting more and more inconvenient before Covid and the expense of flying only to be treated poorly by TSA or an airline with overbooked flights or other issues isn’t as worth it to me anymore especially for trips that require layovers. I’ll be driving to a destination 2k miles away this year and simply traveling less to distant spots in general. Life is too short for the aggravation.
    I wonder if I’m an outlier or if enough people are getting turned off by high prices and poor treatment to change the airline market once things get back to some semblance of normal.

    • Harrold says:

      Your an outlier, everyone else only gets 2 weeks vacation.

    • Lance Manly says:

      I remember when I finished my last consulting job in 2011, I waved to the crew and said “Thanks, but you won’t be seeing me again”. So far so good.
      Air travel these days is pretty hellish, but there are some spots I would like to go to that can’t be accessed any other way….

    • The artist formerly know as Marcus says:

      I love everything about air travel (not sarcastic – I really do). I enjoy airports, martinis while I wait for my plane, milling around book shops, and walking through the relentless crowds in my own bubble with earbuds in playing a soundtrack to the mayhem. I am also really productive on planes. For some reason, I just get super focused and can crank out 8 hours worth of content generation on my laptop on a 4 hour flight. I like scotch in a plastic cup and little snacks. I can’t count how many flights I’ve been on – thousands. I still just truly enjoy it. But sadly, my company is still holding back on business travel. Hopefully it will start up soon (I’m expecting July).

      • Wolf Richter says:

        The artist formerly know as Marcus,

        This is hilarious. Not sure if you’re serious or not, and it doesn’t matter. “I like scotch in a plastic cup,” I mean come on. It’s just hilarious! Made my evening.

        • The artist formerly know as Marcus says:

          Wolf, I am a Scotch aficionado at home. Always neat in a heavy glass. But even in first class, the best offering is usually Johnnie Walker. And I honestly am delighted every time I sip on that mildly peaty blend from the little plastic cup. There’s something comforting and warmly pleasant about it.

          I also think I’m a bit of an oddball optimist. Most of what people complain about in life doesn’t connect with me. Sometimes I feel like the whole world is standing in a big circle bitching and complaining about trivialities. Flying across the country in a few hours while drinking cheap scotch in a cheap cup is a freaking miracle of human invention in my opinion.

        • Phil says:

          Louis CK talked about this hilariously. Search for “Louis CK – Everything Is Amazing and Nobody Is Happy”

          I agree with you about loving air travel.

        • VintageVNvet says:

          Although there certainly are SOME on here otherwise, it appears to me that most on here are ”children of privilege” that has nothing to do with color, race, etc., and, thus, subject to venting when their latte is too cold or milky or whatever makes a latte good or bad. (Disclaimer: never had one.)
          Some of the SOME have had it rough and rougher in their mortal life so far, and this too shows in their comments.
          Having kinda sorta had my share of both lean and fat years, almost in accordance with various religious suggestions, I have to agree with marc,,,
          enjoy what you have that you want when you have it,,, enjoy the more simple and less costly things the rest of the time, and work and save to get what you need;
          mostly, learn to differentiate between NEED and WANT because a deep and wide chasm divide the two for sure.

      • Michael Gorback says:

        This sounds like a bad acid trip from Sound of Music. Just missing sleigh bells and whiskers on kittens.

        When I fly I’m usually asleep around “wheels up”.

        Bad news: FAA currently prohibits alcohol in-flight. However, I think a few martinis slipped into an empty water bottle would probably escape scrutiny.

      • fajensen says:

        Yeah, I don’t like flying, I prefer to be drunk while on the plane, but I do like airports (except the american ones, which are all rundown, grubby, and have only one “family restaurant” with the main feature being lots of feral kids running amuck in greasy food residue).

        I also like the airport lounges – especially those requiring hard-to-get Credit Cards or Loyalty Cards, so that not just anyone can get into them, the point being excluding the feral kids and the greasy food.

        I can do heroic amounts of creative work at conferences and in the airport lounge. It is the energy of those places.

    • nodecentrepublicansleft says:

      I guess you never saw the comedian Louis CK’s bit called “Everything is Amazing and Nobody is Happy”? In it, he laments being on a plane with a whining teenager next to him complaining about the wifi, etc.

      CK later admitted on tv that the teenager didn’t exist. He was the whiny brat. He jokes about ‘the miracle of flight’, traveling 500mph in an aluminum tube.

      A trip from NY to CA that only 150 yrs ago was done on a wagon train, where “the people who arrived weren’t the same people that left”. People died, babies were born, you fought the Indians on the way, etc…

      For many of, the pain and hassle of the flight is FAR LESS than the pain and hassle of driving several thousand miles. Do I want the misery over relatively quickly or drawn out over days?

      If your destination is 2K miles away, that’s a 4K round trip. At 60MPH, that’s about 67 hrs in a car. Let’s say you drive 8 hrs a day…that’s 8 days of driving.

      I hate many things about flying but compared to 67 hrs in a car, I’ll take the plane almost every single time.

      • MarketMissing says:

        This trip is to visit family and friends, some of whom live on the way which is why the slow travel works well and I’m a parent which feeds the cost calculation. I’m lucky to already live in a nice part of the country so spending thousands to get somewhere after a couple of really negative experiences with airport security (the last one involving a far too intimate pat down) and nearly getting bumped on overbooked flights during layover really turned me off. I can take the thousands spent on the flight and use it to bump up accommodations, food and outings nearby. Stressy packed flight or take the fam to a really nice dinner after zip lining or horseback riding close to home?

    • Lisa_Hooker says:

      You folks are ridiculous. This isn’t like apples and oranges. This is like pineapples and rib eyes. Personally, I find that there seems to be a noticeable difference between Swissair first class and Southwest coach. A few times in my life I also noticed things were even nicer in a Lear 75 or Bombardier Challenger 650; the whiskey was excellent.

  4. Seneca’s Cliff says:

    Maybe Joe Biden will give out “fedbux airmiles” instead of fiat in the next round of stimmies. That would get things moving.

    • nodecentrepublicansleft says:

      Or maybe a money laundering, molester bigot will be an ineffective one term President with “accomplishments” such as: Failed Nuclear Deal w/North Korea, Failed Trade Deal w/China, Failed Response to Global Pandemic (600K dead), Trillion Dollar Wealth Transfer to Corps/1%, etc, etc.

      “Making America Great Again” was Ronnie Reagan’s campaign theme.

      That cult/crime family couldn’t come up with an original idea if they tried. But they wouldn’t try. Grifters / Criminals like them just run “cons” (ex. fake “college” for rubes).

  5. Rosebud says:

    AirBNB model looking a little wrinkled.

    • Arizona Slim says:

      I just got off a Zoom call with someone who’s planning to take a within-Arizona vacation with a relative. They’re renting an AirBNB for a week.

    • MonkeyBusiness says:

      Their staying power should not be underestimated.

    • Rosebud says:

      The stonk has a good bit of volume today, 3x average. Insiders are no longer in lockdown. That’s why I mention it. But we can spread rumour if you like, such as how they accept Canadian dollar at par soon. That sucker is getting up there.

    • BigAl says:

      @Rosebud,

      Not really. You can’t keep a good financialization scheme like AirBNB down for long. At least not in these United State…

      • Javert Chip says:

        Any credible numbers on how dependent AirBNB is on business travel?

        My guess (retired geezer business guy) would be “not much” (maybe 10-20% market share of of AirBNB?).

  6. c1ue says:

    View from the air:
    Flights going into Florida remain 100% packed – in all 5 of the incoming flights I or my wife have taken in the past 6 weeks.
    Outgoing flights were also packed except when ending in San Francisco: those are around 2/3rds full (still pretty full but weak compared to all other flights ending in Florida).
    The Miami metro area this past Friday was nuts. A Ramada, 10 miles from the airport and nowhere near the tourist spots or highway was asking $300/night. No rental cars day of; cars a week or more in advance were $80 before taxes. This includes off airport and Enterprise locations.
    High end places were charging $1000/night, mid-end $600.
    South Beach was nuts: restaurants packed, bars packed. The person I was meeting Friday said he has not been able to get into restaurants that he’s been going to for years and where he knows the owner by name. Our after-dinner drinks – we passed up 3 bars that were literally bulging at the seams at midnight.

    • Rowen says:

      I’m guessing the reason for the lighter San Francisco flights is continuing weakness into Asia?

      • MonkeyBusiness says:

        A bunch of Youtubers reported empty flights on a number of routes. SFO to Singapore (5 people to a plane is not a rare occurence), SFO to Tokyo (less than 40 to a plane), SFO to Hong Kong (same like Tokyo), etc, etc.

        Not a surprise, those places are very hard to enter for foreigners nowadays. Heck Taiwan has also restricted foreigner access (only Long Term Residents can enter).

    • RightNYer says:

      Fort Lauderdale was busy this weekend, but not outrageously so. I suspect some of the situation in Miami is due to wealthy South Americans whose own countries are still in lockdown.

    • Wolf Richter says:

      c1ue,

      Some flights are packed because airlines have slashed capacity. They’re now bringing back some of that capacity they’d slashed, but far from all of it.

      • Nacho Libre says:

        Both are possible scenarios (more travellers, less planes). How do we know what’s the true reason?

        Luckily for us the curious, Miami International Airport publishes monthly statistics of domestic and international travellers. Please look it up.

        • Wolf Richter says:

          In terms of capacity cuts, the airlines started announcing their capacity cuts in March, April, and May last year, by plane model and plane age, and how many of those planes would be permanently retired or sold, including for conversion to cargo planes (Delta sold some old planes to Amazon, for example). Airlines have updated investors on their capacity numbers at least quarterly. I covered some of these at the time in a bunch of articles.

    • Lance Manly says:

      Probably low margin recreational travel. The money is in business travel.

    • David Hall says:

      Southwest Florida seasonal visitors did not come this past winter, or came and have returned to their summer homes in the north. Restaurants are not full. Waterfront dining, no reservation needed.

      When I flew before the pandemic, they were booking full flights. They sold more tickets than they had seats for, as some people cancel or do not show up. If too many checked in, they offered people vouchers to wait for a later flight to their destination.

  7. Engin-ear says:

    Let me think.

    Without hi-end subsidies, no more air travel for the middle class.

    Anyway, ICE engines being evil and Electric motors impractical, forget the air travel and speed ships too.

    The leaves me ole good sailing ship to cross the ocean between US and Europe.

    The problem it takes 2 months.

    But! I can work from anywhere, including the ship. So that’s Ok I guess…

    • Brent says:

      There was a modicum of progress in Trans-Atlantic passenger transportation since “Mayflower” of 1620 which sailed for a couple of months and landed 400 miles off its destination point.

      Modern “Queen Mary 2” crosses the Atlantic in 7 days.

      Fares start at £499 ( bilge room ? 😀)

  8. Rosebud says:

    Spinal Tap showed up in Miami with a banana stuffed in their leotards, word got around and it got nutty, with long line ups for Selfies.

  9. Robert says:

    I look at my local train station parking lots and they’re still near empty. About 1-3% occupancy of 150 car lots.

    I suspect business travel is deader than dead for the next six months. We really need a legitimate ‘all clear’ on this Viris stuff. Not the bogus all clear we’re currently getting.
    Management needs to feel their careers are not jeopardized by sending employees out in the field.

    Still, I think people are much more likely to get on a train than a plane. And those seats are still empty.

  10. Beardawg says:

    WOLF…..Great article as usual….found a typo for ya:

    “…much like many types of _____________ have seen their brick-and-mortar retailers business…”

  11. Lance Manly says:

    Off topic, but a great quote for all those who say everyone is running from Cali. Bloomberg.

    ——————————————————————-
    “In the latest sign, home prices in the state shot past $800,000 for the first time in April, according to data released Monday by the California Association of Realtors. The new median value of $813,980 is up 7.2% from March and 34% from a year earlier, when pandemic lockdowns mostly froze the housing market.”

    • Flatlander says:

      Lance,
      Yep. 70’s track home in Sunnyvale, not Palo Alto, a 2,270 sq.ft.( average) , 6,209 sq.ft. lot (small), two story. Sold for $630,000 over asking!! Final Close price $3,025,000. This price is close to highest ever sold in Sunnyvale. Insane, absolutely insane!! Average 0.6 months supply, average 10 days on the market (if you believe the flyers?).
      I get tons of realtor flyers every week showing with homes selling for $220k to $600k over asking, all selling for over $2.3 million (on the flyers). YIKES!
      If Californians are moving out in droves, who the hell is buying these things! Market here is like quick sand, you shovel a scoop out and it immediately fills back in.

      • NJGeezer says:

        Wow, unbelievable. That lame-o buyer is looking at about $3k/month property taxes. Stupid is, as stupid does.

    • Wolf Richter says:

      Home prices in California surged, even as the population dropped for the first time ever, and even as new homes were built at the fastest rate since 2008. Homes — including vacant homes — are now investment properties.

      https://wolfstreet.com/2021/05/09/california-housing-market-first-ever-population-drop-meets-biggest-home-construction-boom-since-2008/

      • MCH says:

        Which is kinda odd if you think about it. In the bay area especially, earthquake danger, wildfire danger, likelihood of higher taxes on the horizon. Yet, the housing prices are nuts. More nuts in fact than ever. SF notwithstanding.

        I get periodic flyers from real estate agents from the San Jose area, they are all about how the agents are selling just a standard SFH, nothing special at something like $400K over asking. I remember $1M over asking in certain east bay locations.

        It makes me wonder how low did the asking start out at. I suppose the idea is to lock onto assets now while the rates are good, and money is still worth something, because with all the talk of inflation coming, that same house might cost another million plus in a couple of years. And let’s face it, our salaries aren’t growing at that clip.

  12. Xavier Caveat says:

    When I was a kid the stewardesses were so hawt and they didn’t trust anybody over 30 to do the job, and now she is still at it up in the air, pushing 64 and the beverage cart.

    The big difference between commercial flying and the Greyhound bus, is you almost never see homeless people on planes.

    • fajensen says:

      It is you who have gotten more authority: The older stewardesses are all in the business travel areas, they all are selected to look like the archetypical CEO’s secretary. To make us feel more “at home”, one assumes.

      The hawt young ones, they are all down in monkey-class.

      • LeanFIREQueen says:

        And both the older and the hawt stewardesses know full well that white old men sawck.

  13. Crush the Peasants! says:

    Happy mall story: Knighthead loans $57M on mall-to-life-science-office conversion.

    Greenwich, CT-based private real estate finance company Knighthead Funding has provided repeat borrower Equator Capital Management with $57.25 million in short-term, first-mortgage debt to fund the buildout of a newly leased state-of-the-art 245,000 s/f life sciences campus in Durham, NC.

    The financing modifies an existing $34 million construction loan Knighthead originated in 2019 to fund Equator’s conversion of a former outlet mall into a creative office campus to meet the demand from major companies wishing to expand their operations or relocate to the Research Triangle.

    Equator, a New York City-based real estate investment and development firm, recently signed Invitae Corp., a biotech company involved with DNA sequencing, to a long-term lease for the entire project.

  14. MiTurn says:

    I have a family member who is Chinese-born, but now a proud, naturalized American citizen. Although she has traveled many times to mainland China to visit family before this covid mess, she won’t now. Unless you show proof of vaccination to the satisfaction of the Chinese authorities at the airport they will require you to undergo an anal swab. That’s just too humiliating. She won’t do it and I don’t blame her.

  15. Rosebud says:

    Here’s a story that combines housing, airplanes and students.

    Which is the wobble?

    Real estate owner wants to rent whole house but to a group. Iow he’s monetized each bedroom and targeting overseas (airplane) customer, presumably here to get an education.. but you never know these days what’s up with migration strategy.

    the wobble? Is it the backdraft of empty flights to Asia mentioned earlier?

  16. Seneca’s Cliff says:

    The high margin business fares enabled the airlines to offer the lowest tier of fares. Without the volumes of business travelers these super economy fares will have to go away. When that happens an entire category of what I call “junk airline travel”, will disappear. Bachelorette parties in Nashville, grade school kids going to baseball tournaments in Florida and cross continent travel to comic book conventions. My future air travel rule is, “ if we didn’t do it in 1979, we won’t be doing it in 2023.

  17. BuySome says:

    Fly Navy…see the (extra-terrestrial) world!

  18. YuShan says:

    This is another upward pressure on CPI inflation. Business travel often subsidises economy fares, so with business travel way down, I expect upward pressure on economy fares.

    I haven’t done any international travel for 1.5 years now and I’m not expecting any in 2021 because things remain too uncertain for the remainder of the year (especially the locations where I would like to travel).

  19. rick m says:

    I hope those who enjoy today’s commercial air travel had the opportunity to experience the more luxurious past in the US skys. My 90 year old mother was an Eastern Airlines stewardess in the Fifties, and won’t eat filet mignon to this day, they served and ate so much on her flights. Pan American Airways, Braniff(Chief pilot lived across the street in North Dallas), Allegheny, Southern, the early Southwest, all were class operations offering a premium travel experience. Expensive, but there was always greyhound and Trailways. For many years you just walked on, no “security”. Seats were fatter and the occupants were skinnier, as were the attractively uniformed flight staff. Children received special attention, which doubtless had a salutory effect on the social rehabilitation of the little rotters. Didn’t work for me. It was a special thrill to fly then, as a train probably was a century earlier. Business travel is a shrinking market without a big reason to exist, just small ones, and that’s where they will spend their money. Specialist missions make more sense than generalized sales and marketing trips, beancounters shut R&D out. So tourism and pleasure travel become financially responsible for paying their own way. People will value a vacation more if they’re not always on one. And the non-revenue deadheads who can’t shut up about how their ticket cost $27 will no longer have to be ejected at altitude, just a dream

    • LeanFIREQueen says:

      I only fly with top 10 international airlines, Emirates is better than any US airline ever was.

      Why would you pay a ticket in an airline that gives millions of tickets away to its retirees, family members or retirees, employees, new credit cardholders… makes no sense to expect great service with such an arrangement.

Comments are closed.