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"If the winter is lost, there will be considerable trauma in the industry": Airlines fear Omikron shock

2021-12-02T06:19:04.218Z

The big airlines are still suffering from the travel restrictions of the pandemic. Now they fear another slump, of all times during the important Christmas business. It does not seem to affect everyone equally badly.



Enlarge image

"Significant trauma"

: Emirates President

Tim Clark

warns of a collapse in business

Photo: ABDEL HADI RAMAHI / REUTERS

The major airlines, which appeared to be slowly recovering from the effects of the pandemic, are worried about an omicron shock.

According to analysts, they are preparing for a loss of demand due to the corona virus, which could again force them to change their flight plans and destinations at short notice and, if possible, to concentrate more on the domestic markets.

Christmas time is actually a high season for airlines.

Many travelers had already booked their tickets.

The German Lufthansa had just paid back all of its state rescue loans.

But since the news about the new variant, concern has grown in the industry.

The sharpest warning came from

Tim Clark

, president of the golf carrier Emirates. A lot will be decided in the weeks leading up to Christmas and New Years. This year in particular, "December is a very important month for the aviation business," he said on Tuesday. "If this month is lost, or if winter is lost for many airlines, the industry will experience significant trauma." Even

Scott Kirby

, CEO of US company United Airlines expected, the new variant in the short term on the bookings will impact. It was not until Wednesday that the first Omikron case was also brought up in the USA - with a traveler from South Africa.

The stock exchange prices of the aviation and tourism industry had plummeted after the weekend, but recovered a little. The rating agency Fitch has nevertheless lowered its forecasts for global passenger numbers in 2021 and 2022. The appearance of new variants such as Omikron increases the likelihood that conditions will remain volatile. "It feels a little like we're back where we were a year ago - and that's not a good outlook for the industry and beyond," said

Deirdre Fulton

, partner at consulting firm MIDAS Aviation.

The airlines are preparing for renewed travel restrictions, although the old ones were far from being completely lifted.

In order to get away with it as lightly as possible, the International Civil Aviation Organization (ICAO) urged moderate measures.

The costs of significantly reduced global air mobility would affect all countries.

The different national regulations are considered to be one of the reasons for the still declining demand in the industry.

The impact of Omikron is now likely to vary from country to country and region to region, as every government reacts differently and global airlines and their business models are very different.

Japan Airlines and ANA Holdings, for example, suspended new reservations for international flights to Japan until the end of December on Wednesday as the country tightened border controls.

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

In the European Union, on the other hand, it is likely to be more difficult for the airlines.

An analysis by UBS shows that the US airlines have not yet changed their planned capacity.

This is 87 percent in December of the 2019 level and is expected to reach 92 percent in January.

United Airlines is even taking on the Newark-Cape Town route these days;

Delta Air continues to expect strong bookings over the Christmas period.

"In the past year, every new variant has seen a decrease in bookings, but also an increase once the onslaught has subsided. We expect this pattern to continue," said

Helane Becker

, an analyst at Cowen and Co.

The major European airlines such as Lufthansa or British Airways are far more dependent on international travel than their US counterparts, so they are likely to be more affected by the effects of the Omikron variant.

In addition, the virus variant has been detected more frequently in the EU.

"We can see that there has been an impact, especially on the short-term departures," said EasyJet boss

Johan Lundgren

on Tuesday.

"But it's not the same level of impact and decline that we saw in the old days when the restrictions were put in place."

In Asia, countries like Australia, Japan, Singapore and Thailand had only started cautiously to lift the border restrictions in the past few weeks.

The number of passengers stayed there at a fraction of the previous level.

The airline Cathay Pacific Airways from Hong Kong, for example, which has no significant domestic market, operates with 10 percent of the pre-crisis capacity.

lhy / Reuters

Source: spiegel

All news articles on 2021-12-02

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