Bloomberg Quicktake: Now published this video item, entitled “Vaccine Passports Keep Europe Flying While China and the U.S. Slow” – below is their description.
The delta variant of Covid-19 is scything through aviation just as key markets were getting back on their feet.
In the U.S., Southwest Airlines Co. is blaming the delta strain for a rash of canceled bookings and a slowdown in demand that may push it and several others to quarterly losses. After leading the industry’s recovery for much of last year, China is in retreat with airlines offering the fewest seats in six months as authorities attempt to stamp out an outbreak. Australia’s carriers are also in reverse with more than half of the country in lockdown.
“There is every chance the delta variant will dampen any recovery,” said John Grant, chief analyst with OAG. If there is progress, it will be “stop-start” as outbreaks make governments nervous about opening borders, he said.
A rare bright spot is Europe, the only place where so-called vaccine passports are widely used. The continent was an aviation laggard for most of 2020 as it floundered under infection waves, but airlines such as Ryanair Holdings Plc are now capitalizing on high inoculation rates and providing more flights.
Here’s how the highly-contagious delta variant has affected major markets:
Hopes are fading that a summer recovery, where passenger traffic reached 80% of pre-pandemic levels, will extend into the fall as a surge in infections spooks travelers and investors. The Bloomberg Americas Airlines Index last week tumbled 5.6% to its lowest level since February.
Southwest warned on Aug. 11 of a slowdown in bookings and rising cancellations, and said it will be difficult to replicate July’s profit over this quarter. Low-cost airlines Frontier Group Holdings Inc. and Spirit Airlines Inc. have also said they may report losses for the three months through September.
The delta variant is putting the brakes on corporate demand, too. Office reopening delays of up to 90 days are causing “a bit of a pause” in the recovery of domestic business travel, Delta Air Lines Inc. Chief Executive Officer Ed Bastian said in an interview with Fox Television on Aug. 9. The carrier is close to 50% of its 2019 level for U.S. business travelers.Bloomberg Quicktake: Now YouTube Channel
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