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What Black Friday Means for the Airline Industry

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It’s almost that time of year again where we can be thankful for family, but also thankful for cheaper flights thanks to Black Friday deals. Over the years, full service carriers like American Airlines (AAL - Free Report) and Delta Air Lines (DAL - Free Report) , as well as smaller airlines like WOW Air and Ryanair (RYAAY - Free Report) , have offered affordable deals for travelers. Airline companies have become a part of the e-commerce craze that comes during Black Friday and Cyber Monday, with more consumers now adding flights to their online shopping cart.

What can we Expect?

In the past, consumers would usually look for discounts on electronics or clothing during Black Friday and Cyber Monday. Recently however, people are also buying flights as more airlines have been offering discounts. According to CBS, last year about 48% of the deals on Cyber Monday were for hotels and vacation packages and 20% for airfare. Consumers saved up to 50% in a few deals, which is why airlines are offering discounts this year again.

Alaska Air (ALK - Free Report) noted that at least 70% of consumers who booked a flight with them last year were solo travelers and only 25% were couples. It seems as though the demographics of the travelers booking these flights during Black Friday/Cyber Monday vary throughout the years. Since these airlines have more solo travelers we would be looking towards more of the younger working class looking to book for the upcoming holidays or any business trips.

With any airline company, there will be competition, especially during this time of year. People are looking for cheap flights for the holiday season and they look to those airlines that are offering them. Even though these airlines offer these discounts to “clear stock” (to fill seats on flights that otherwise may be unprofitable), according to Skyscanner, they still seem to have a rising amount of sales while successfully profiting from them. Consumers usually save up to 25% on flights in comparison to the actual flight price, and from last year’s deals, consumers ended up saving more on international flights.

Airline Stocks

Earlier this year, airline companies were in a downward fall, with shares decreasing. It wasn’t until late June, when the NYSE Arca Airline Index saw a 10% rise. October seemed to be a pretty bad month for airline stocks, seeing as Southwest Airlines (LUV - Free Report) , American Airlines and JetBlue (JBLU - Free Report) , just to name a few, all fell -21.3%, -15.1% and -13.5%, respectively. However, investors believe that going into 2019, these numbers will change for many major airline companies and that overall, the industry will be more profitable.

The Consumer is Always Buying Flights

Although the industry as a whole has been struggling over the past couple of months, consumers will always be buying flights and tickets to travel no matter what. So with Black Friday/Cyber Monday deals, airline companies can look towards increasing sales and overall better performance. It is apparent that not only do these sales entice more consumers to book flights, but it also allows these companies to score a lot of sales and in return make profit.

As mentioned above, the main demographic purchasing these deals are usually millennials. According to CNBC, young people between the ages of 18 to 34 would rather spend money on traveling than buy a house. Younger people want experience more than things, hence most, or even all, of their money going towards flights. So when these deals come around on Black Friday/Cyber Monday, those millennials who thrive on taking spontaneous trips are the ones purchasing them.

Bottom Line

Airlines make money, no doubt. But, they make even more when customers spend on a number of flights during Black Friday/Cyber Monday deals. In a nutshell, Black Friday means better outlook for the airline industry in the upcoming year.

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