Australia and New Zealand have – uniquely in the developed world – pursued a zero-Covid policy by shutting their borders since early 2020. Both have reacted to local outbreaks with lockdowns and domestic travel restrictions. The strategy has proved popular at home and helped keep infections, illnesses and deaths from the virus low compared with other countries – but at a terrible cost to their aviation sectors.
This week the two nations’ flag-carriers, which have relied on internal services and international cargo flights for a year-and-a-half, revealed grim financial results. Loss-making Qantas reported that revenue from passenger operations fell almost 70% in the 12 months to 30 June. And that was after a previous financial year impacted by the first three months of the crisis. Its counterpart Air New Zealand also slid deeper into the red in the equivalent financial period.
With neither Canberra nor Wellington in a mood to backtrack on their hawkish approach, any reopening looks a distant prospect. However, Qantas has plans in place for a restart of international operations in December. The airline hopes to resume flights to a series of “Covid-safe” destinations such as Canada, Japan, Singapore, the UK and the USA, as well as to New Zealand. A short-lived trans-Tasman travel bubble was suspended over concern about rising cases in Australia.
Elsewhere in Asia-Pacific, the region whose aviation sector has been most affected by the pandemic, governments and airlines are talking about re-starting international connections, and in India and Japan there are strong signs of domestic recovery. Traffic has been growing in India since a devastating wave of Covid-19 earlier this year, and Japan’s big two – ANA and Japan Airlines – intend to increase capacity this winter season as a once sluggish vaccine roll-out picks up speed.
The roll-call of airlines requiring their staff to be vaccinated grows, with Air Canada this week joining its tiny compatriot Porter in mandating the jab as a condition of employment. Regular testing will not be offered as an alternative. Meanwhile, although Delta Air Lines is not joining fellow US airline United in introducing a compulsory vaccine policy, it says staff members of its health insurance plan who are not vaccinated will have to pay an extra $200 to cover potential hospital costs.
Swiss has become the first major European airline to demand that its “entire flying personnel” are jabbed by mid-November, partly as a duty of care to colleagues but also because segregating unvaccinated crews would lead to a rostering nightmare. “We must initiate this action now if we are to continue to maintain our global route network and fulfill our obligations towards our employees,” says Swiss chief executive Dieter Vranckx.
As we wrote last week, killing off an airline can be difficult, despite the deepest crisis for the industry in decades. Moves are afoot to resurrect defunct UK regional carrier Flybe, while perennial loss-makers South African Airways and Alitalia – branded for now as ITA – are set to return. SAA, which has been out of action for 12 months, will restart flights in September after having had its operating licence restored, while ITA is targeting October to resume operations.
Look out too for a new name on the transatlantic market. Start-up Norse Atlantic has already revealed plans to fill a gap vacated by Norwegian. Now Iceland’s Play has filed for permission to begin services from Reykjavik to the US east coast next summer – it has already launched a number of flights to Europe. The Airbus A321neo operator is likely to tap into demand established by another Icelandic budget carrier, Wow, before its demise in 2019.
With chaotic scenes continuing in Kabul, several US airlines and their employees have been volunteering to help with the evacuation effort of foreign citizens and other Afghan refugees, as part of the Civil Reserve Air Fleet initiative. Rather than flying into Afghanistan itself, the carriers have been operating humanitarian flights from air bases where evacuees have been taken initially by military aircraft. United Airlines says more than 8,000 of its employees have volunteered for the missions – many of them fluent in languages spoken in Afghanistan.
Finally, there has been much talk about post-Covid-19 air travel, with most experts agreeing that domestic and short-haul leisure travel will recover quicker than long-haul and business, thanks to lingering border restrictions, and a change in corporate culture. Companies that have spent almost two years learning how to communicate on Zoom and Teams may conclude that virtual meetings are a cheaper alternative to dispatching employees on expense accounts around the world.
However, there is a counter argument. Some believe that – in the short-term at least – removing international travel bans will lead to an uncorking of pent-up demand for visits to much-missed family and friends. Many executives will be desperate to take to the skies to rebuild relationships with overseas clients. And better-off leisure travelers – including the retired – will spend funds they have saved during lockdowns on bucket-list trips to far-flung and exotic destinations.
Air Astana chief executive Peter Foster believes there could be another fundamental shift – the creation of a hybrid market between business and leisure travel. Companies offering employees more freedom to work away from the office could prompt many to combine vacations with business, travelling to, say, a holiday home for the weekend, but staying on to work during the week. It is just one reason why forecasting post-crisis travel habits is a very inexact science.
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