Airport Experience® News - Pre-Conference Issue 2025

AIRLINES

The impact of Spirit’s restructuring may vary across the market. Some airports may struggle if there are voids left by Spirit, but in terms of the macro space, they will be filled by other airlines, according to Swelbar. Shifting Demand Beyond the ULCCs, the industry is seeing demand shifts that are forcing them to adjust their offerings. Business travel, for example, has recovered to about 90% of pre-pandemic levels, but passenger demographics could be changing. “We are seeing fewer people who earn $75,000 a year or less flying,” Harteveldt says. “Those who do are flying slightly less often. At the other end of the scale, if you are earning $150,000 or more a year, you are traveling more, and you are spending more. Corporate travel policies are actively discouraging unnecessary trips, Harteveldt notes. “Corporate CFOs are telling their people, ‘we don’t want you to travel,’” he says. “They are, in some cases, not only reducing travel budgets, but they are intentionally making changes to travel policies, to make business travel less pleasant for their employees to

dissuade people from traveling on business when they can.” Swelbar predicts that business travel may be different going forward. Some travel could be combined with leisure activities, or family visits, but it will not result in the disproportionate share of revenue that it did before the pandemic. Macro Backdrop While analysts maintain cautious optimism for 2025, questions remain about how the overall economy may impact performance. “The biggest risk into 2025 – especially the second half of the year – continues to be the macro backdrop,” Morgan Stanley’s Shanker said, citing concerns about slowing GDP growth and services spending. Growth expectations remain modest, with Swelbar projecting “a slow growing year for the industry as a whole – lower single-digit growth.” Harteveldt suggests the industry should be braced for upheaval, saying that “If the economy takes a downturn in the next 12 or so months, and it’s a deep and prolonged downturn, that would be felt by airports and airlines.”

Above: Spirit Airlines, which filed for bankruptcy in 2024, may have grown too big too quickly, analysts say.

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AX NEWS FEBRUARY 2025