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Global airlines prepare for omicron volatility

Published : Friday, 3 December, 2021 at 12:00 AM  Count : 267

SYDNEY, Nov 2: Global airlines are bracing for more volatility due to the omicron coronavirus variant that could force them to juggle schedules and destinations at short notice and rely more on domestic markets where possible, analysts say.
Many travellers have already booked trips for the Christmas period, a peak season for airlines, but there are growing industry concerns over a pause in future bookings and further delays to the already slow recovery in business travel.
Fitch Ratings said it had lowered its global passenger traffic forecasts for 2021 and 2022, with the emergence of new variants like omicron highlighting the likelihood that conditions would remain volatile for airlines.
"It feels a little bit like we are back to where we were a year ago and that's not a great prospect for the industry and beyond," Deidre Fulton, a partner at consultancy MIDAS Aviation, said at an industry webinar on Wednesday.
Airlines have been blaming a lack of consistent and stable health protocols as well as border restrictions for depressed international travel demand.
New protocols in the wake of the omicron variant are expected to add to their headache.
The United States, for example, is moving to require that all air travellers entering the country show a negative COVID-19 test performed within one day of departure.
All non-EU travellers to mainland France, where the omicron variant has not been detected yet, will have to show proof of a negative COVID-19 test, regardless of their vaccination status, a government spokesman said on Wednesday. Ireland and Portugal are also demanding that travellers produce a negative test.
Airlines are currently using a range of apps to verify test results. Delta Air Lines said it would comply with Washington's directives, but did not say if the new testing requirement would need the carrier to make any changes to its verification app.
Omicron's impact will vary by country and region due to each government's response and the diverse nature of global airlines as well as their business models.
Japan Airlines and ANA Holdings on Wednesday suspended new reservations for international flights arriving into Japan until the end of December as the country tightens border controls.
Hong Kong's Cathay Pacific Airways, which lacks a domestic market and is operating at only 10 percent of pre-pandemic capacity, said it was too early to assess Omicron's impact on demand.
Airlines in countries with large, strong domestic markets like the United States, China and Russia are better shielded from the greater uncertainties of international travel.
An analysis by UBS shows US carriers have not yet changed their scheduled capacity, which is running at 87 percent of 2019 levels in December and is expected to reach 92 percent of pre-COVID capacity in January.
United Airlines is launching its Newark-Cape Town route on Wednesday despite a US ban on non-citizens entering from South Africa and Delta Air is expecting strong bookings over the Christmas period.    Reuters









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