Where Can You Fly Right Now? U.S. Vaccine Drive Gives Airlines a Boost

A powerful vaccine drive in the U.S. has pushed North America’s air-travel comeback past Asia’s for the first time since the Lunar New Year holiday in February.

Airlines in the U.S. continued to gain momentum in the most recent week, based on data from flight tracker OAG. Asia, which had led all regions, lost ground as countries such as Singapore and Indonesia held back on air travel to fight a surge in coronavirus cases.

The switch highlights the power of accelerating Covid-19 vaccine programs in bringing back activities like entertainment and tourism that became high risk with the onset of the crisis last year. Countries that have quickly rolled out shots are making rapid progress toward the return of flying— including in the European Union, which agreed Wednesday to reopen its borders to nations and travelers deemed safe, including from the U.S.

Air traffic in Europe still lags the rest of the developed world, but it’s begun to close the gap. The progress has been made possible by rising vaccination counts: notably in U.K., but also across the EU after a slow start.

Where Can You Fly Right Now? U.S. Vaccine Drive Gives Airlines a Boost

Countries in Asia feeling the sting of rising cases have responded by tightening restrictions to counter the threat of a highly transmissible coronavirus variant that first took hold in India. This week, Singapore and Hong Kong suspended plans for a travel bubble that was set to start on May 26.

While Western nations have also taken defensive measures, they’ve emphasized accelerating vaccine rollouts to protect their populations. Singapore, Thailand and Taiwan, for example, are far behind the U.S., U.K., or Israel in per-capita inoculations.

What’s Happening in Air Travel This Week

Overall, air travel ticked up in the most recent week. Global capacity rose by one point to 58% of pre-crisis levels, based on Bloomberg’s weekly flight tracker, which uses OAG data to monitor the pulse of the comeback. 

Aviation has been hit hard throughout the pandemic. The industry lost $126 billion last year and stands to bleed another $48 billion this year, based on estimates from the International Air Transport Association. Governments that slammed borders shut early on are loath to loosen up too quickly, fearful that — like India — they’ll backslide on progress fighting a disease that has now killed almost 3.4 million people. 

The cautious pace of reopening means chances for a strong European bounce-back in tourism this summer are pinned partly on an extension of the peak season in July and August through September, when many tourists will have traditionally gone back to work. This year, there’s hope that pent-up demand from vaccinated masses will hold up for another month.

Where Can You Fly Right Now? U.S. Vaccine Drive Gives Airlines a Boost

Airlines located inside of large domestic markets such as China, the U.S. and Australia have generally fared better than those in smaller locales like the U.K., Singapore or Greece. That dynamic is starting to shift, and vaccines are the big driver.

In the U.S., where 48% of the population has received at least one dose, carriers have added capacity to international destinations in the Caribbean and Latin America, fed by demand from vaccinated travelers less afraid to get on planes. Still, domestic flights make up 85% of the global total.

Overall, U.S. capacity is now down less than 25% from the same week in 2019, jumping more than 7 percentage points in the past month, with the big three of  American Airlines Group Inc., Delta Air Lines Inc. and United Airlines Holdings Inc., along with discount specialist  Southwest Airlines Co. and others accelerating their expansions. JetBlue Airways Corp. said on Wednesday that it would initiate long-awaited trans-Atlantic services from Boston and New York’s to Heathrow and Gatwick airports in London, starting from August. 

“Vaccinations have really picked up,” George Michalopoulos, chief commercial officer of Hungarian discounter Wizz Air Holdings Plc, said on the sidelines of the Arabian Travel Market event in Dubai this week. The U.S. is “two to three months ahead of Europe but that shows the path forward.” 

Europe Gets Going

Until Wednesday, the return of international travel in the EU has been complicated by border rules set independently by more than two dozen member countries. The decision on a coordinated reopening will likely accelerate travel once it takes effect, potentially within the next week or two. The U.S. is likely to be white-listed, meaning non-vaccinated travelers will also be let in, based on the EU guidelines and its declining rate of Covid-19 cases. 

Progress was made earlier this week, when the U.K. — which has gotten jabs into 55% of its population — finally removed a legal ban on leisure escapes. Sunny Portugal, one of the few countries on Britain’s “green list,” has been the biggest beneficiary. 

Greece, Italy and France have also made strides, with EU vaccine rates accelerating, and anticipation of more outside visitors. In all, airline capacity closed the gap with 2019 levels by 4.4 percentage points in the past week, the most of any region. 

Where Can You Fly Right Now? U.S. Vaccine Drive Gives Airlines a Boost

While vaccinations are the most important factor to a return to travel from a medical perspective, ending border restrictions will have a more-immediate impact transforming pent-up demand into ticket sales, said John Grant, chief analyst at OAG. Unilateral decisions around lockdowns ``are just damaging everyone’s confidence and frustrating airlines.’’

Crossing the Pond

One key objective for U.S. and European airlines is a meaningful restart of trans-Atlantic flights. The highly profitable market was gutted last year as the virus first surged in the west. While countries such as Italy had already started to ease restrictions on Americans, the opening isn’t reciprocal.

On Tuesday, Deutsche Lufthansa AG added its voice to a growing chorus of airlines demanding decisionmakers from Washington and London to Brussels change the rules.  The German carrier said it’s adding flights to Atlanta and Orlando starting in June based on rising demand, after curbs were loosened in its home country.

Where Can You Fly Right Now? U.S. Vaccine Drive Gives Airlines a Boost

Meanwhile, U.S. businesses including hotel chains and car-rental firms are pushing hard for a reopening. The EU aims to lift recommended curbs on U.S. visitors as it introduces its Green Digital Certificate that should facilitate easier border checks. 

Once curbs are lifted, a good portion of the trans-Atlantic market “could be back very quickly, since these routes are for many airlines amongst their most profitable and there is a large amount of pent up demand,” said OAG’s Grant. He said it may take until next year for schedules to be fully restored.

One catalyst for a rebound could be a meeting of the G7 nations in Cornwall, England, from June 11 to 13, said Sean Doyle, the chief executive officer of British Airways.

He said he expects Britain to be “the first country this side of the Atlantic” permitted to resume travel to U.S. for non-Americans.

©2021 Bloomberg L.P.

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