US consumers' air travel intentions for leisure purposes leveled off in March year over year despite higher fuel costs and geopolitical concerns, UBS Securities said in a note sent Tuesday.
The brokerage conducted a survey of 6,877 consumers across the world, including 1,754 in the US, from March to early April.
Crude oil prices soared after the US and Israel launched attacks against Iran at the end of February, disrupting shipments through the crucial Strait of Hormuz.
Plans to undertake leisure travel in the US over the next 12 months slipped to 82.8% from 83.1% a year ago, but remained above March 2024 levels, the survey results showed. Business travel intentions decreased on an annual basis, but rose from two years ago.
"The key takeaway was that intentions among US consumers to undertake leisure and business travel over the next 12 months remain high," UBS analysts, including Atul Maheswari, wrote in the note. "The survey results show that significantly more US consumers expect to increase spend in the next 12 months than spend less on their trips -- a trend that's consistent with last year's survey."
There was an annual moderation in those citing plans to travel more with large US carriers Delta Air Lines (DAL), United Airlines (UAL), American Airlines (AAL), and Southwest Airlines (LUV), according to UBS. However, the number of consumers willing to travel about the same with each of the four airlines increased.
Most consumers consider price as the most important factor when purchasing airline tickets for leisure travel, while about half of the survey respondents look at destination and airline brand, according to UBS.
"Airline brand was meaningfully more important than (three) years ago as was seat class. This should bode well for the larger airlines with a stronger loyalty/premium offering," Maheswari said, referring to Delta, United, American, and Alaska Air (ALK).
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