Vaccines, travel bans, and the long climb back to normality

Jabs may be going into arms at pace, and the rise in Covid-19 infections, hospitalization rates and deaths that bedeviled many countries in January looks to be passing its peak. However, with worries about the export of more virulent or vaccine-resistant strains of the virus, air travel restrictions are still in force around the world, and in some cases getting tougher.

After Australia and New Zealand suggested that international travel to and from those countries might not resume until 2022, another reminder that the industry is unlikely to be back to normal any time soon came with the latest cancellation of a major industry gathering this week. This time it was EBACE, the European business aviation showcase held each May in Geneva.

Private aviation has fared better than its commercial equivalent during the crisis. The world’s ultra-wealthy and powerful still want to fly around the planet for business or family reasons, and, if they can afford to own or charter the likes of a Gulfstream or Bombardier Global jet, will often choose to do so in what they view as a more discreet and Covid-secure environment.

However, the decision to cancel the show appears to have less to do with the economic health of the sector itself and more with the unwillingness of companies to send their staff into a situation where they might feel vulnerable, fall ill, or have to quarantine. These sorts of concerns will continue to impact confidence in business travel throughout 2021, even as the virus recedes.

This week airline organisation IATA confirmed what would have come as no surprise to anyone – that 2020 saw the sharpest decline in passenger traffic ever. Numbers taking to the skies were almost two thirds down on 2019, something director general Alexandre de Juniac described as a “catastrophe” for the industry.

Victims of that catastrophe include China’s HNA Group, parent of Hainan Airlines, whose debt-fuelled acquisition spree of the past few years caught up with it when it was placed in bankruptcy this week. Philippines flag-carrier PAL was just one of several airlines announcing major job losses, confirming that one third of its workforce will be cut from March.

Elsewhere in Asia, there was more encouraging news – although everything is relative in these troubled times. Korean Air scraped an operating profit for 2020 of $213 million on the back of a strong cargo business and cost-cutting. Meanwhile, Singapore Airlines, whose hub-based network has been devastated by the crisis, managed to cut its losses in the final quarter of the year.

The picture is mixed too in the USA, with ultra-low-cost carrier Allegiant seeing a post-virus recovery “on the horizon” and suggesting that its fortunes are “moving in the right direction”. However, American Airlines warns of 13,000 job cuts as a result of a slower than hoped recovery and the end of a government aid package.

The return to service of the 737 Max may be giving some relief to Boeing – saddling huge debts as a result of the pandemic and the narrowbody’s near two-year grounding. However, the airframer has pushed back first deliveries of the largest variant – the Max 10 – by two years to 2023, the same year that it will now hand over its initial latest-generation 777X.

Long-haul travel is expected to take longer to recover than short-haul, with consumers and companies reluctant to venture too far from home for holidays and business trips. There is unlikely to be any longer-haul service than Qantas’s direct flights from London and New York to Sydney and Melbourne that the airline was on the verge of unveiling just before Covid-19 hit.

This week Qantas chief executive Alan Joyce insisted that its so-called Project Sunrise could be resurrected in 2024, with flights half way around the world on up to 12 Airbus A350-1000s it intends to order. Joyce also claimed that another type feared to be a relic of a previous aviation age – the out-of-production A380 – might still have a future with the carrier.

Qantas’s dozen double-deckers are all sitting in the Mojave Desert – at a storage facility at California’s Victorville airport – and will be for at least three years. But, after that, Joyce told a Eurocontrol webinar, there could well be opportunities to deploy the superjumbos in certain “scheduling windows” such as overnight transpacific flights from Los Angeles.