‘Corona Corridors’ Hold Promise for Cross-Border Travel Recovery

(Bloomberg) --

The growing popularity of travel bubbles -- a concept where two or more countries agree to eliminate a quarantine mandate for their citizens -- is by no means a solution to revive ailing cross-border travel.

However, it does offer a glimmer of hope for the eventual recovery of the airline sector, and a gradual rebound in international flights, Raymond James analyst Pavel Molchanov said.

“This is a promising first step,” he said in a note.

Travel bubbles, also known as “corona corridors,” are created when countries with a comparably moderate level of Covid-19 risk enter a pact. The deal allows visitors to skirt the costly and vacation-day eating two-week quarantine period that some governments have imposed on incoming travelers, according to a brief co-written by Raymond James’ energy and airline analysts.

“Who wants to spend 14 days in a hotel room and pay money for it without any access to people or anything else?” Molchanov said in an interview.

The Baltic states were one of the first to implement such a pact, but that was mostly tied to ground transportation, according to Molchanov. Denmark and Norway have formed a bubble, as have Jamaica, Trinidad, Barbados and several smaller Caribbean island nations. Meanwhile, Britain, Australia, China and some other countries are mulling such arrangements, he said.

“British Airways would stand to benefit,” Molchanov said. And if Australia and New Zealand do a travel bubble, that would be good for Qantas Airways and Air New Zealand.

Some countries that won’t make the list any time soon include the U.S., Russia and many Latin American countries, which are all too high-risk, the analysts wrote.

In the big picture, travel bubbles are a stop-gap measure. Nothing short of a vaccine will return long-distance travel to where it was before the proliferation of the coronavirus, Molchanov said.

“If individuals are afraid to board a plane, the existence of bubbles is meaningless for them,” he said.

©2020 Bloomberg L.P.