Global airlines prepare for Omicron volatility, agility will be key

FILE PHOTO: Airlines prepare for new coronavirus variant Omicron
FILE PHOTO: A notice of COVID-19 safety measures is pictured next to closed doors at the departures hall of Narita International Airport on the first day of border closures to prevent the spread of the variant novel coronavirus Omicron in Narita, east of Tokyo, Japan, November 30, 2021. REUTERS / Kim Kyung-Hoon / File Photo

December 1, 2021

By Jamie Freed and Rajesh Kumar Singh

SYDNEY/CHICAGO (Reuters) – Global airlines are bracing for more volatility as the Omicron coronavirus variant could force them to change schedules and destinations in the short term and become more dependent on the market domestic market if possible, analysts said.

Many travelers have booked trips for the Christmas period, the peak season for airlines, but the industry is increasingly concerned about future booking pauses and further delays leading to a recovery. the already sluggish capital of the business.

Fitch Ratings said it has downgraded its global passenger traffic forecasts for 2021 and 2022, with the arrival of new variants such as Omicron highlighting the possibility that conditions will remain volatile for airlines. are not.

“It feels like we’re going back to where we were a year ago and it’s not,” said Deidre Fulton, a partner at consulting firm MIDAS Aviation. must be a great prospect for the industry and beyond.

Airlines have blamed a lack of consistent and stable health protocols and border restrictions for falling international travel demand.

The new protocols after the Omicron variant were supposed to give them more headaches.

Example: US, is in the process of requiring all air passengers entering the country to have a negative COVID-19 test result taken within one day of departure.

All non-EU travelers to France, where the Omicron variant has not been detected, will be required to present proof of COVID-19 testing, a government spokesman said on Wednesday. negative, regardless of their immunization status. Ireland and Portugal are also requiring travelers to present a negative test.

Airlines are now using a range of apps to verify test results. Delta Air Lines said it would comply with Washington’s directive, but did not say whether the new test requirement would require the carrier to make any changes to its verification application.

Omicron’s impact will vary by country and region due to the response of each government and the diverse nature of global airlines and their business models.

Japan Airlines and ANA Holdings on Wednesday suspended new bookings for international flights to Japan until the end of December due to the country’s tightening of border controls.

Hong Kong’s Cathay Pacific Airways, which lacked the domestic market and operated at only 10% of capacity before the pandemic, said it was too early to gauge Omicron’s impact on demand.

Airlines in countries with large and strong domestic markets such as the United States, China and Russia are better shielded from the greater uncertainties of international travel.

An analysis by UBS shows that US carriers have yet to change their scheduled capacity, running at 87% of 2019 in December and expected to hit 92% of pre-COVID capacity in December. January.

United Airlines will launch its Newark-Cape Town route on Wednesday despite the US ban on non-citizens entering South Africa, and Delta Air is expecting a boost in bookings over the Christmas period. born.

“Over the past year, each new variation has caused bookings to drop, but then back up again as the spike wears off. We expect the same pattern to emerge,” said Helane Becker, an analyst at Cowen and Co.

Travel booking site Kayak says international travel searches from the US dropped just 5% on Sunday – in stark contrast to a 26% drop in searches from the UK, which has tightened requirements. inspection request for customers.

Major European airlines are more dependent on international travel than US airlines, putting them at greater risk of falling out of the Omicron variant.

In Asia, countries like Australia, Japan, Singapore and Thailand have only begun to cautiously lift border restrictions in recent weeks, and passenger numbers remain small compared to pre-pandemic levels. before the Omicron variant was discovered.

John Grant, chief analyst at travel data firm OAG, said moves by Japan and Australia to delay entry for some foreigners due to Omicron were “sad and frustrating” but The proportionate impact on tourism is “relatively insignificant.”

Airlines globally have been more nimble in quickly adjusting their schedules and destinations during the pandemic, and that is expected to continue, he said.

(Reporting by Jamie Freed in Sydney, Rajesh Kumar Singh in Chicago and Sakura Murakami in Tokyo edited by Kim Coghill and Mark Potter) Global airlines prepare for Omicron volatility, agility will be key

Bobby Allyn

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