Kovar Capital: Is it safe to travel this holiday season?

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Hey Taylor: The number of flights getting canceled is starting to freak me out a little. Is it even safe to book holiday travel? - Mason

Hey Mason: That’s a great question that I don’t think anyone can answer confidently until after the fact. Yes, I think it’s safe to book travel, but only if you do so with the expectation that schedules will get shifted and your airport waits could be a lot longer than you’re used to. We can’t predict the future, but we can get into the factors that will affect these cancellations.

Weather… as always. Earlier in the year, Southwest had to cancel around 2,000 flights over a weekend. More recently, American Airlines canceled around the same number. In both cases, the first problem mentioned was inclement weather, which was definitely a factor—though labor shortages for flight attendants and ground crew played a huge role as well. Whatever it was that took the problem from bad to worse, one thing we can usually count on in November and December is some harsh weather. Even if you get an unseasonably warm stretch in the Northeast, record lows somewhere else in the country will throw the nexus of transcontinental flights out of whack. We can’t blame the airlines for winter weather happening during winter.

Worker shortages. Believe it or not, talking about it hasn’t made it go away. Whether it’s pandemic restrictions or fewer people feeling the need to work certain jobs, industries across America can’t seem to find the workers they need to stay open. This ongoing struggle becomes even more pronounced when people test positive for COVID-19, forcing them—and their close contacts—to quarantine for X number of days. It’s hard to imagine this will change before the holidays, especially for people like airline workers who won’t be put in a confined space if they test positive or are showing symptoms.

Return to “business as usual.” The airlines got hit really hard in the spring of 2020 when things first shut down. Government assistance helped keep companies afloat, but there’s been a lot of trial and error figuring out how to manage staffing and passenger expectations during these strange times. Flights were canceled pretty frequently before the pandemic, but with everyone starting to travel again at the same time, there’s a real spotlight being shined on the issue. It’s going to take at least another holiday season for things to get back on track, maybe even longer.

There’s no way of knowing what will happen with flights around Christmas. The best you can do is plan ahead and not get angry with the ticketing agent who’s probably working a double shift and wishes they could get on a plane and go on vacation as well. Hope it all works out!

Disclosure: Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. To submit a question to be answered in this column, please send it via email to Question@GoFarWithKovar.com, or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.

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