Omicron borders from Japan to Spain wreak havoc on air travel

(Bloomberg) – Airlines, passengers and businesses have had to respond to a deluge of travel restrictions introduced to slow the spread of the omicron coronavirus variant.

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A first wave of flight bans from southern Africa, where omicron was first detected, has given way to broader measures that will make travel more expensive and less convenient – if possible – recalling the first days of the pandemic.

From Tuesday, Japan will ban foreign visitors until more is known about the variant, Prime Minister Fumio Kishida said in Tokyo on Monday.

The UK has reintroduced mandatory PCR testing for all arriving passengers and said they must self-isolate until they test negative. Israel closed to all incoming foreign nationals for 14 days, the Philippines said travelers from European countries including Switzerland and the Netherlands would not be welcome for several weeks, and Singapore delayed the launch of travel routes vaccinated with Qatar, United Arab Emirates and Saudi Arabia. .

Spain and Switzerland have tightened access to arrivals from Britain, whose return from travel was quickly disrupted. British low-cost airline EasyJet Plc said on Sunday its flight schedule was operating normally, “but we are continuing to monitor the situation closely.”

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As the full impact becomes clearer over the next few days, “it will be problematic for business travel – particularly to the UK,” said Martin Ferguson, spokesperson for American Express Global Business Travel .

Travel dilemma

Organizers of the World Aviation Festival in London told attendees the event will go ahead as planned. The group has organized tests at two nearby hotels from Tuesday, the day the new UK rules come into force. Arriving delegates can isolate themselves while awaiting the results.

Still, Wizz Air Holdings Plc chief executive Jozsef Varadi will not be at the conference, the Budapest-based low-cost carrier told Bloomberg, with its chairman Robert Carey taking his place. The sessions will now be webcast to those who can no longer be there, organizers said.

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Internal functions of the company are also disrupted, with one of these events in the UK going from the hybrid in person, as the new testing and isolation requirements have reportedly surprised some attendees who are expected to arrive on Tuesday, according to a report. person close to the file. .

Negative incentives

Pleasure travel will also have an impact, while friends and relatives visiting loved ones after long absences are more likely to go through a trip, said Alex Irving, analyst at Bernstein in London.

“Christmas bookings will obviously be lower than we expected before the omicron variant,” he said. “As you add barriers to the trip like PCR testing and isolation requirements, everything changes the incentives.

To move back

Airlines face a return to uncertainty from changing rules and public health developments that plunged customer plans into chaos and undermined demand earlier in the pandemic.

British Airways, for example, halted flights to Hong Kong until at least November 30 after an employee tested positive for Covid-19 and staff were sent to quarantine. The airline said it is monitoring its operations as the situation evolves.

The risk of a lost second winter has already weighed on airline stocks, with the Bloomberg EMEA Airline Index down 18% for the month on Friday. They made up for some of the loss on Monday, amid reports that some people infected with the omicron variant developed mild symptoms.

British Airways parent company IAG SA was up 3.1% at 1:57 p.m. in London, Ryanair Holdings Plc up 6.4% in Dublin, Air France-KLM 2.7% in Paris and Deutsche Lufthansa 4% AG in Frankfurt.

“Friday’s dramatic stock price moves have already more than factored in a realistic case of the Omicron variant declining for most of our stocks,” Citigroup analyst James Ainley said in a research note.

Falling stock prices will make it harder to raise new capital to straighten out balance sheets – IAG has € 12.4 billion ($ 14 billion) in net debt, for example.

“This comes at a time of the year when airlines will be looking to strengthen their liquidity and, to a lesser extent, profitability, and this after an already difficult 18 months of revenue depletion,” said John Strickland, who leads JLS Consulting, based in London.

(Updates with the absence of the CEO of Wizz Air at the London conference from the eighth paragraph, the latest share prices at the 15th)

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