The Outlook for the Airline Industry

I am quoted in this article on Delta Airlines in the Observer:

It’s very likely the other airlines will show similar trends when they release their first quarter reports, said David Kass, a clinical professor of finance at the University of Maryland. Kass attributes the recovery to Americans’ urge to hit the road. 

“The public is very anxious to get out and travel and resume their lives,” Kass said. “I think there’s a lot of pent up demand. I think the outlook is very bright in the near term.”

“They’ve essentially been shut down for two years,” Kass said. “During lockdown, people were spending money on refurbishing their homes and on goods because they couldn’t get out. And now they are ready to take advantage of travel and tourism and a chance to see friends and family as well.”

Things may be a little more up in the air come 2023, Kass said.

“Many economists are predicting that with the Federal Reserve likely to raise interest rates sharply over the next year, year-and-a-half, to bring down inflation, that could lead to a recession in 2023,” Kass said. “And that would probably have a negative impact on the airlines next year.”

Ideally, the [Federal R]eserve will manage to achieve the delicate balance that would lead to a “soft landing,” Kass said. “But that is extremely difficult to achieve and hard to predict.”