Travelers Are Waiting Till Last Minute to Book Flights
Travelers are waiting longer to purchase airline tickets, making it harder for carriers to gauge near-term demand.
(Bloomberg) --
Airline customers are waiting longer to purchase tickets, making it harder for carriers in Europe to gauge near-term demand in light of new travel barriers.
Rapid rule changes have led passengers to spend more time assessing whether a trip will be allowed, Wizz Air Holdings Plc President Robert Carey said Wednesday. The trend, which took hold earlier in the Covid-19 pandemic, has been heightened by the emergence of the omicron variant over the past week, according to Carey and EasyJet Plc Chief Executive Officer Johan Lundgren.
“Customers are booking closer and closer in,” Carey said at the World Aviation Festival in London on Wednesday. “Every week it feels like it gets one day closer to departure.”
EasyJet and others said they’re seeing a softening of demand through year-end, throwing a steady travel recovery before omicron into question. U.K. searches for international flights dropped by more than a quarter last weekend after Covid testing requirements were toughened, according to travel site Kayak.
“The latest round of government restrictions across the world have been uncoordinated and inconsistent, and that’s made Christmas travel more complicated for both airlines and passengers,” said former British Airways CEO Alex Cruz. While carriers “can quickly adapt to knee-jerk reactions, it is still a blow to the recovery which was just getting underway.”
New Rules
The European Union has proposed member states review essential travel restrictions every day, with the aim of coordinating efforts to keep the omicron variant out of the bloc. The U.S. is poised to require arrivals show a negative Covid test taken within one day of departure instead of the current three days.
The quick reaction of the U.K. government, which was criticized for moving too slowly when the delta variant emerged, is “the wrong thing to do,” said Shai Weiss, the CEO of U.K.-based transatlantic specialist Virgin Atlantic Airways Ltd., citing the impact on the economy and jobs.
“As quickly as you introduce those measures, if things turn out that they are not as significant, take them back immediately as well,” Weiss said in an interview.
Signs Crossed
Airline executives are striving to understand the ramifications for travel -- even as scientists rush to establish the new variant’s potency, its transmissibility and its resistance to vaccines.
“People are wanting to know what is the latest in terms of restrictions and what could potentially happen,” EasyJet’s Lundgren said at the London event. Having said that, there are “very encouraging signs for next summer.”
Airline stocks have seesawed since late last week on developments tied to omicron. European airlines such as Air France-KLM, Deutsche Lufthansa AG and British Airways owner IAG SA rose on Wednesday with the broader market as traders assessed the latest news. But the S&P 500 Airlines index was off 1.1% midday in New York.
International flying has seen the biggest setback from omicron so far, with the impact poised to deepen with Japan and France also signaling tighter borders.
Japan asked airlines to stop new inbound bookings for the month of December. Travel on previously purchased tickets can go ahead, pending developments with omicron.
France will demand negative Covid tests for non-EU visitors -- potentially clogging transit across the English Channel -- while AFP reported it plans to lift a ban on travel from southern African countries starting Saturday.
Industry group Airlines for Europe said in a statement that it hoped the EU’s proposal will counter the disparate responses it’s seen so far from governments on travel rules. “Reviewing measures on a daily basis is a good approach in order to amend travel restrictions as needed,” it said.
U.S. carriers such as JetBlue Airways Corp. reported no major dent to demand in the massive domestic market.
“It’s too early to say at this point whether we’ve seen an impact or not,” JetBlue CEO Robin Hayes said in a Bloomberg TV interview. With the U.S. coming off of a busy Thanksgiving holiday weekend, flying and booking remain robust, he said.
However, Hayes added, JetBlue has seen greater interest in flexible products like tickets that come with no change or cancel fees, as well as travel insurance. With wait times growing on customer-service phone lines, the New York-based discount operator is looking to hire hundreds of staff, he said.
Each new Covid variant is likely to cause less demand impact than the prior one, United Airlines Holdings Inc. Chief Executive Officer Scott Kirby said Tuesday in an interview with Bloomberg News.
“My initial sense is that here in the U.S. we’re continuing on a path to recovery and continuing the return to some semblance of normalcy,” he said at the APEX Expo conference in Long Beach, California. “I think we as a society are coming to grips with the fact that Covid is endemic, meaning we’re going to have to live with it and getting used to living with it.”
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