Cowen's Helane Becker: 'All the airlines will survive 2020, 2021 is a whole other story'

Helane Becker, Cowen Senior Reseach Analyst, joins The First Trade with Alexis Christoforous and Brian Sozzi to discuss future outlook for the airline industry and much more.

Video Transcript

ALEXIS CHRISTOFOROUS: The airline industry looking to make a comeback as customers slowly begin to return to travel. Here to discuss is Cowen Securities Senior Research Analyst Helane Becker. She joins us on the phone. Helane, good to have you on the show.

Looking through your note, you said that people are booking directly on the airline's website. They're trying to use those vouchers and the miles that they've collected over the past few months. But they're also looking for flexibility. Are they buying the tickets and then holding on, going you know what? We might have to just change plans at the last minute here if things go awry.

HELANE BECKER: So the easy answer is they were-- yes, they were sort of doing that back in May and June. But when we had the second round of-- or whatever, the extension, whatever you want to call what's happening in the Sunbelt states-- when we had that increase in cases, people started holding off and booking closer into travel. And most of the time, you can get the best deals on the airline websites direct, A.

And B, the other thing is with those vouchers, a lot of vouchers that were given out in the early days of March and the early days of the pandemic were really high-value tickets. And those tickets have come down a lot in price. And so we're seeing more people book using cash rather than redeeming vouchers necessarily and holding onto the vouchers for a little longer until they can recoup the entire value of the ticket.

But I think that stuff has to be open and stay open for people to want to travel. And we definitely see pent-up demand. On Sunday, we saw more than 800,000 people travel for the first time since mid-March. Yesterday it dropped back again into the 700,000.

But we're a little above where we thought we'd be around now. We thought we'd be sort of in the half a million passengers a day range. And the fact that we're regularly between 3/4 of a million and slightly above is really encouraging to us, because we still think we're going to get to a million by the end of the year. And that would certainly be the-- what I would call the start of the recovery.

BRIAN SOZZI: Helane, is there one-- is there one airline over the past month or two that has impressed you with how they have addressed the pandemic and gives you hope that they could survive this situation?

HELANE BECKER: Well, of course, we think all the airlines are going to survive, or at least the US airlines are going to survive 2020. What happens in 2021 is a whole nother story. But we're really hopeful that we get back to some level of normalcy later in the fall.

And I think in terms of what the airlines are doing-- it's hard to socially distance on board a plane. I mean, it's like no such thing. But Delta, Southwest, JetBlue, Alaska are all trying different measures to keep people apart. Delta, JetBlue, Southwest are keeping the middle seats empty and booking to 60% load factors. Alaska Air did a buy one, get one sale where you could buy one seat and you could buy the seat next to you for just the taxes.

So they're trying different measures to tell people that it's safe. And it is. I don't know if you've talked about this with any of your guests, but airplanes are very safe.

Their air that comes in from the cabin that's directly over your head is designed to be vertical. It goes straight down. And then it goes out through the floor. And it's recirculated through a HEPA filter every two to three minutes.

So the air itself is very safe. And if you wear a mask, you should not get COVID on board a plane. Airports are doing everything they can to try to keep-- there are X's on certain seats to try to keep the seats empty at the gate. There are thermal cameras that are being installed in some airports in the United States. Hawaii already started.

And the idea is to try to make the whole process, from the time you get into your rideshare car and arrive at the airport till you get to your destination, as safe as possible. Because everybody wants travel and tourism to come back. It's 5% of US GDP.

It's millions of jobs. Every one airline job creates 13 jobs in the domestic market. It's not only the airlines and the rideshare companies. It's hotels and even the shops at airports that you see so.

So it's a huge part of the economy. And I don't think we can have a robust US economy without [AUDIO OUT]

ALEXIS CHRISTOFOROUS: All right, we're going to leave it there. Helene Becker of Cowen Securities, thanks so much for being with us this morning.