Airlines Rejoice as U.S. Agrees to Trans-Atlantic Restart
(Bloomberg) -- Europe’s biggest trans-Atlantic airlines and airports reacted jubilantly to a U.S. move allowing most vaccinated foreigners to enter the country, ending a ban that’s been in place since March 2020.
Shares of British Airways parent IAG SA, Air France-KLM and Deutsche Lufthansa AG all surged following the Monday announcement, which made clear those without Covid-19 inoculations will still be unwelcome.
The U.S. move is “fantastic news for our group,” Air France-KLM Chief Executive Officer Ben Smith said in an interview with Bloomberg TV. “We expect a return of 2019 traffic numbers to move forward very quickly.”
BA CEO Sean Doyle said the rethink marks “an historic moment” that will finally allow travelers to book with confidence, while London Heathrow airport -- the busiest in Europe prior to the pandemic but hammered by the U.S. curbs -- said the move would provide a vital economic boost.
Virgin Atlantic Airways Ltd reported a 91% increase in U.S. bookings in the hour following the announcement, with CEO Shai Weiss stressing the firm’s reliance on American flights.
The North Atlantic corridor connecting the U.S. and Europe was the single most profitable corner of the aviation market before the coronavirus crisis, a hotspot for those paying extra for first- and business-class seats. European flag carriers are far more reliant on those routes than their U.S. counterparts, which have extensive, profitable domestic networks to fall back on.
In Europe, regional traffic is instead dominated by discount airlines such as Ryanair Holdings Plc, EasyJet Plc and Wizz Air Holdings Plc.
Carriers on both sides of the Atlantic have lobbied forcefully for a relaxation of travel curbs throughout the pandemic, and particularly after vaccine rollouts gathered pace earlier this year. While the European Union and the U.K. began allowing in inoculated Americans over the summer, the Biden administration held off on reciprocating.
“There’s pent-up demand both on the leisure and the corporate side,” Air France’s Smith said. The carrier relied on U.S. routes for 40% of capacity and sales in 2019 and plans to start laying on flights as early as Tuesday, he said.
Lufthansa CEO Carsten Spohr said the easing of restrictions is also “excellent news for the trans-Atlantic partnership,” with companies able to develop their relationships personally again.
European airline lobby group Airlines For Europe said the reopening in November will come just in time for friends and family to reunite over the festive season.
“With more than 70% of adults fully vaccinated in Europe, we’re happy to see the evidence-based policy-making we’ve been asking for finally coming to fruition,” a spokeswoman said.
IAG closed 11% higher for its biggest gain in 10 months, while Air France-KLM added 5.3% and Lufthansa gained 5.5%.
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