Research @ Citi Episode 58: Airline Volatility - Smooth Skies or Turbulence
Dec 11, 2025
John Godyn, Citi's Head of Aerospace, Defense and Airlines, shares his insights on the airline industry. He discusses the record demand for holiday travel and its critical role in airline profits. John reveals why consumers continue to fly despite rising costs, touching on the strength of leisure and premium travel. He defines the 'super majors' like Delta and American Airlines, explaining their competitive advantages. Additionally, he explores M&A prospects and the impact of recent bankruptcies, offering a glimpse into the future of the market.
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Holiday Travel Drives Revenue Signals
- Holiday travel volumes are at multi-year highs and set a positive demand signal for airlines.
- Strong holiday seasons let carriers rely less on business fares and improve overall revenue management.
Leisure Fills Planes; Business Makes Revenue
- Leisure travel accounts for roughly two-thirds of passenger volume while business travel makes up about two-thirds of revenue.
- Filling planes with leisure passengers gives airlines flexibility to optimize higher-yield corporate pricing.
Post‑COVID Shift To Premium Leisure
- Post-COVID travel mix shifted from corporate vs leisure to premium vs leisure, with premium leisure rising.
- Corporate travel remains below pre-COVID peaks but premium leisure and paid upgrades have filled the gap.