Over 119 million people in the U.S. are expected to hit the road over the coming days, surpassing pre-COVID-19 peaks, with air travel seeing the biggest increase
For one in three Americans, the next few weeks will be a bit of Holiday cheer mixed with the travel blues. It's going to be crowded on the roads and in the airports.
A record number of travelers are expected to hit the road between Dec. 21 and Jan. 1, surpassing highs not seen since before the COVID-19 pandemic, according to the American Automobile Association.
The Transportation Security Administration expects this to be one of the busiest holiday seasons on record. The airport security agency said it expects to screen as many as 39 million passengers between Dec. 19 and Jan. 2, an all-time high.
That comes as airline stocks have largely been soaring, with companies like Delta Air Lines Inc. (DAL), up nearly 50% on the year, Alaska Air Group Inc. (ALK) rising 61% since last December and United Airlines Holdings Inc. (UAL), having more than doubled in the same period of time.
The S&P 500 Airlines Industry Index XX:SP500.203020 has jumped nearly 50% in the past 12 months.
The AAA predicts that 119.33 million Americans will travel more than 50 miles to enjoy the holidays during the final week of this year, up nearly 3% from the year before. The expected figure is slightly higher than the 119.3 million travelers AAA says journeyed in the same period in 2019, the last year before the pandemic.
Most of those travelers are expected to drive, but AAA projects that the number of air passengers will rise significantly, with the number rising 5% compared to last year and up over 7% from 2019.
Domestic cruise bookings during the holidays are up 37% compared to 2023, according to AAA. That comes as cruise companies are also experiencing stock price booms, with Carnival Corp. (CCL) up about 40% year-on-year, Norwegian Cruise Lines Holdings Ltd. (NCLH) up 30% and Royal Caribbean Group (RCL) seeing its stock price nearly double in the past 12 months.
Passengers on other modes of transport - such as rail, buses and cruises - are expected to rise nearly 10% year-on-year, and almost 15% compared to 2019, AAA predicts, although the overall number is relatively small.
One bit of good news for those heading out for the holidays, the spike in air travel comes as ticket prices have actually declined. End-of-year flight prices are down 9% on average compared to the year before, according to online travel agent Kayak.
But at the same time, hotel prices have risen, so the overall cost of travel might actually turn out to be higher, according to a survey conducted by NerdWallet.
The post-COVID return to travel comes at a banner time for the airline industry as the number of passengers has surged and many major carriers have shaken off many economic disruptions caused by the global pandemic.
Many airlines have raised their estimates for the coming year, and airline stocks have jumped since the election of Donald Trump in November, which analysts have predicted would be accompanied by a more favorable regulatory environment.
For example, the Department of Justice under the Biden administration earlier this year blocked the merger of budget carrier Spirit Airlines Inc. (SAVEQ) with JetBlue Airways Corp. (JBLU), citing the negative impact on low fares and options for travelers. Spirit has since filed for bankruptcy after merger talks with Frontier Airlines reportedly broke down.
Just last week, Deutsche Bank raised its price targets for 10 of 11 U.S. airlines it analyzes.
-Lukas I. Alpert
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