Volatile International COVID-19 Rules May Delay Recovery

Global airlines concluded their first meeting since COVID-19 brought their business to its knees on Tuesday, expressing confidence about pent-up demand but pleading with governments to standardise scattered border laws to avoid a return to recession.

The International Air Transport Association (IATA), which represents 290 airlines, claimed that misunderstanding over travel restrictions was impeding the industry’s nascent recovery following the pandemic’s worst-ever decline in air traffic.

“People desire flight. We’ve seen compelling evidence to the contrary,” Director General Willie Walsh stated. “They are unable to fly because of restrictions on overseas travel.”

International travel, according to IATA, is expected to treble next year, surpassing the dismal levels experienced during the pandemic and reaching 44% of pre-crisis levels in 2019. Domestic travel, on the other hand, is expected to reach 93 per cent of pre-pandemic levels.

The trade association, which represents dozens of state-owned carriers, attributed the disparity to broad disparities in admission criteria and certification requirements among the world’s top 50 aviation markets.

Even several airlines and leasing business executives attempting to attend the industry’s annual meeting in Boston were unable to travel or required additional quarantine time.

Airlines asked for the abolition of vaccination restrictions and the establishment of common health protocols at borders, however global coordination in aviation is typically slow.

“To be honest, governments have made it difficult for airlines and the travelling public to comprehend the regulations of flying,” said Joanna Geraghty, president of JetBlue, which hosted the event in a hotel shared with domestic tourists.

Nonetheless, the CEO of Dubai’s Emirates, one of the most positive executives on the chances for recovery once restrictions are lifted, said bookings in reopened markets such as the United Kingdom and the United States have “gone up tremendously.”

“That reflects a bow wave of demand that we are seeing across the board,” said Tim Clark, the company’s president. “Air travel demand will re-establish itself… sooner rather than later.”

Airlines were encouraged by the Biden administration’s decision to reopen the United States to air travellers from 33 nations, including Europe, on the critical trans-Atlantic flight in November.

However, airlines left Boston as they arrived, with severely stretched balance sheets, and Clark predicted that the majority would stay risk conservative and focused on cash recovery for the next 2-3 years.

IATA warned carriers that significant hurdles remained while voicing displeasure at airports and other suppliers for failing to do enough to alleviate the crisis’s misery.

While the White House has not specified a timeframe for the easing of travel restrictions on Europeans, JetBlue anticipates it will occur prior to next month’s US Thanksgiving break.

“If the reopening is delayed, the entire sector will suffer,” Chief Executive Robin Hayes said following the Oct. 3-5 summit, which also established a target of nett zero emissions by 2050.

United Airlines CEO Scott Kirby said bookings for trans-Atlantic flights increased last week compared to the same period last year.

AerCap, the world’s largest leasing company, said reopening the world’s most significant long-haul market successfully would establish a precedent for other markets to follow.

“Airlines… lack the resilience they formerly possessed,” Chief Executive Aengus Kelly told a gathering of airline executives. “They simply cannot afford for this to fail.”

Source: Reuters

By: Joe Cusmano