There is a maxim that says a week is a long time in politics – meaning a lot of change can happen in a short space of time.
But the phrase appears equally true for the airline industry, which has seen considerable and sudden turbulence over the last seven days.
Whilst the reopening of international air travel markets has been slow and fragile across the year, the drip feed of progress on the easing of border restrictions had brought airlines some measure of confidence going into 2022.
But the emergence of a new Covid variant of concern and of its spread beyond southern Africa where it was first identified is the news airlines have feared since vaccination programmes began emboldening governments to reopen their borders for travel.
A week on – and a number of heightened travel restrictions later – the industry remains unclear on the extent to which the Omicron strain could derail the recovery in air travel demand. It has at the very least brought a temporary return of stricter travel policies, the timing of which is a particular blow for hopes in the Asia-Pacific, where tentative steps to reopen borders had been finally gaining some momentum.
While the spread already of Omicron underlines the challenge of containing new variants of Covid, it is as yet unclear how transmissible or severe the strain is, nor how effective vaccines will prove against it.
Financial markets responded in typically rapid fashion as airline stocks fell sharply as news of the variant emerged. However those airlines to provide market commentary over the past few days have resisted pressing the panic button.
EasyJet chief executive Johan Lundgren, whose airline’s full-year results announcement was overshadowed by questions on the impact of the new strain, reported some softness but stressed it was too early to tell. Indeed, he struck an overall positive note on the summer ahead despite the immediate concerns.
United Airlines chief executive Scott Kirby likewise adopted a similar tone. “My guess is, much like Delta, it will cause a short-term decline in demand,” he says. ”But the trough will be at a higher level than the trough was after Delta. And the next peak will again be higher.”
Airlines need no reminding how quickly fortunes and border access can change – for better or for worse. For the coming days at least, they have little visibility on just how much the Omicron strain could set their recovery off course.
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