BUSINESS NEWS


Iata: Airlines not putting revenue before health


Iata rejected a suggestion that airlines are prioritising revenue over health in calling for Covid-19 tests on travellers to replace quarantine restrictions. Director-general Alexandre


de Juniac accused governments of having “tunnel vision” on quarantine last week, saying: “The slow pace of progress is so frustrating.” But he insisted: “We are not criticising governments or putting profits before health.” He argued: “It’s not realistic


to imagine we will have Covid-19 at a zero level. This virus can be controlled with vaccines. It will


Alexandre de Juniac


Carriers will fail without a summer 2021 season, airline analyst warns


become a common disease with which we live. The key target should be controlling the pandemic and maintaining it below a certain threshold.” De Juniac said: “Systematic


testing should be a mechanism to reopen borders. Add this to vaccines and we will move to a situation that is more normal.” But he added: “All governments


[want] to increase restrictions rather than to replace them with testing.”


A pick-up in demand for air travel in Europe can’t be expected before Easter, say senior industry analysts, leaving many carriers in need of further financing and a risk of failures without summer bookings. Stephen Furlong, senior airline


analyst at Dublin-based Davy Research, said: “Airlines are in hibernation, but it is crucial there is a summer 2021 season. “Without one we are going to


have more failures.” Speaking on a Capa Centre for


Aviation webinar, Furlong said: “Traffic is very weak, but January, February and March are important for bookings.”


Bernstein Research managing


director and senior analyst Daniel Roeska agreed: “This is the most-important time for bookings, but the lockdown and uncertainty about when people will be vaccinated will keep people from booking. The key pick-up will probably happen from Easter.” Furling said: “The most hopeful


[area] is European short-haul, but for any meaningful revenue [to come in], governments have to remove quarantine [restrictions].” He said: “Italy and Spain will


want markets opened. “The prospect of a second year of empty beaches is not good.”


Summer ‘could still be successful’ Ian Taylor


Vaccines will bring a recovery in air travel in the second half of this year but only to half the level of 2019 and some carriers will run out of cash before then, Iata has warned. Iata chief economist Brian Pearce


warned the new variant of the virus has “cast doubt on the Easter season”, but he suggested the summer “could still be successful”. Speaking on a Capa Centre for


Aviation webinar, Pearce said: “We have a difficult three to six months ahead. Vaccines have transformed the outlook, but the timing of vulnerable groups being immunised will vary by country. “The production of vaccines could


allow vulnerable groups in Europe and North America to be vaccinated by the second quarter of the year. [But] it is not going to be the same in developing markets so a full


travelweekly.co.uk Some airlines’


cash may run out before the vaccine boost in the second half of the year


recovery is going to take some time.” Pearce warned of a “further


deterioration” in bookings through the first quarter of this year and said a recovery in the second half would leave global traffic “at 50% of the 2019 level”. He added: “Some airlines’ cash


may run out before the vaccine boost in the second half of the year.” Pearce noted the “partial


recovery” in Europe last summer had “completely stalled”, saying: “Control of the virus was much more difficult than expected outside Asia.” He argued: “Recovery also


depends on the outlook of consumers


and so far we’ve not seen much of an upturn in travel website searches. [But] there is evidence of pent-up demand. When the UK removed the UAE from the requirement to quarantine in November we saw bookings surge.” UK bookings to the UAE had


subsequently fallen because of “what is happening in the UK”, he said. Speaking on an Iata briefing,


Pearce argued: “Air travel is extremely sensitive to the ability to control the virus. We did see some modest improvement in bookings following the vaccine announcements, but a drop-off since. “In Europe, the new variant has


hit bookings. It has certainly cast doubt on the Easter season. We’re now dependent on the speed at which governments roll out vaccinations. “The summer season could still


be successful but it depends on the rollout of the vaccine.”


Iata’s Brian Pearce says: ‘Air travel is


extremely sensitive to the ability to control the virus’


21 JANUARY 2021 55


PICTURE: Shutterstock


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