Where Can You Fly Right Now? Germans Roll Out Their Beach Towels
(Bloomberg) -- After lagging the rest of the world for 15 months, airlines in Europe are gearing up for some semblance of a normal summer. Still barred from the dash to unroll a beach towel are tourists from the U.K., where the government may change tack once more.
Carriers are rapidly adding capacity in Europe to cater to the growing number of bookings, with Deutsche Lufthansa AG deploying jumbo jets to ferry Germans to Mediterranean beaches. British discount carrier EasyJet Plc said about 85% of its operations are now focused on Europe and just 15% in the U.K., in contrast to an even split before the pandemic.
Airlines are desperate to get travel going again after virtually being grounded since the early 2020 onset of the coronavirus health crisis. A vaccination campaign that's gained momentum after a slow start means internal travel within the European Union is being restored: from July 1, holders of so-called digital Covid-19 certificates will be able to move freely between the bloc’s 27 member states if they can prove vaccination, recovery or a negative test.
On Friday, EU governments decided to add the U.S. to a so-called “white list” of countries from which non-essential travel is allowed. The new rules will be in effect in a matter of days, as soon as they are published in the Official Journal of the EU. That means restrictions will be lifted across the bloc, including quarantine-free travel from the U.S independently of vaccination status.
“We have redirected routes that were supposed to go into the U.K. into other European markets, because that’s where we see that we now do have that demand,” said Johan Lundgren, the chief executive officer of EasyJet. “There’s an extraordinary pent-up demand to go traveling.’’
Carriers are hoping to cash in on that rapid influx to help repair their balance sheets and raise vital funds. And there is evidence that demand is rebounding. Last week, Lufthansa said it will deploy 364-seat Boeing Co. 747-8s on two-hour trips from Frankfurt to the Spanish island of Mallorca after looser coronavirus curbs spurred bookings 25-fold since April. The jet will ply the route for four straight Saturdays starting July 17, with an Airbus SE A350 wide-body flying from Munich.
“If borders reopen and tourist attractions reopen, people will be excited to travel and recovery will look similar to the U.S.,” said Helane Becker, an analyst at Cowen Inc. in New York. “Everyone wants some of the tourist dollars that are out there, and you can see bookings pop as the openings occur.”
By contrast in the U.K., airlines are desperately trying to convince the government to allow travel to reopen after it failed to expand the green list of countries that can be visited without quarantining on return and unexpectedly removed Portugal earlier this month.
As a consequence, British Airways said it would put staff back on furlough to preserve cash. Irish discounter Ryanair Holdings Plc and the company that operates Manchester and London Stansted airports said they’d challenge the U.K. policy in court. They say there’s no transparency on how the government assesses travel risk, and the sudden changes are undermining consumer confidence.
“The U.K.’s Covid travel policy is a shambles,” said Ryanair CEO Michael O’Leary, who called for a “pragmatic” approach that gives an edge to vaccinated citizens.
With Britain this week extending domestic Covid curbs until July 19, the government is likely to delay adding to its green list. But there were also signs of a reassessment. Airline stocks shot up on Thursday on news the U.K. may allow fully vaccinated travelers to enter without quarantine from countries classified as amber, or mid-level, risks, including the U.S. and much of Europe. The government cautioned that no decisions have been made.
Without a change, airlines will inevitably favor mainland European markets that are reopening fastest, said John Grant, the chief analyst at flight-tracking firm OAG. He pointed to EasyJet’s plan to move aircraft usually based in the U.K. to Germany, adding that airlines need clarity.
“Germany is open, so carriers can plan with more confidence,” Grant said. “It's a very strong outbound market in the summer anyway and there is a year-and-a-half of pent-up demand.''
U.K. travelers suffered a setback after Italy announced a five-day quarantine on Friday for arrivals from the island, and the restrictions include vaccinated travelers from Britain.
July 19 is also a key date because it marks the start of the summer break for many European schools and hence the beginning of the region's peak travel season, Grant said. It's vital that trans-Atlantic services be restored by then if airlines are to make the most of demand on the key long-haul route, he said.
What’s Happening in Air Travel This Week
Global aviation capacity improved almost 2 percentage points and stands at 61% of 2019 levels, according to Bloomberg’s weekly flight tracker, which uses OAG data to monitor the pulse of the comeback.
In recent weeks, the U.S. and Europe have powered the growth. China’s recent decline has stabilized, with air passenger volume in May almost double from a year earlier to 51 million trips, according to the country’s civil aviation administration.
Last weekend, daily U.S. air travelers exceeded 2 million for the first time since the coronavirus pandemic began, reaching almost three-quarters of the volume recorded on the same day in 2019, according to the Transportation Security Administration. Capacity in the U.S. is now up to 80% of 2019 levels, with domestic flights driving the surge ahead of the peak summer travel season.
But while domestic traffic in the U.S. is surging, international services remain limited, with the main destinations being Mexico, the Dominican Republic, Jamaica, Colombia and Costa Rica, according to a presentation from Airlines for America.
What has been glaringly absent is the North Atlantic corridor, which links the U.S. with Europe. It’s the single most profitable route of the global aviation market, filled with premium travelers paying extra for first- and business-class seats. Throughout the pandemic, carriers on both sides of the Atlantic have lobbied for a relaxation of curbs, a call they pressed during President Joe Biden’s meetings with world leaders in Europe during the past week.
The situation is now set to improve as the EU lifts curbs on the entry of U.S. residents.
“This announcement should result in an increase in bookings to the European countries opening up,” said Anne Agnew Correa, vice president for forecasting and modeling at consultant MBA Aviation. “As long as lockdown restrictions remain in place, the U.K. will miss out on the pent-up demand interested in traveling overseas.”
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