Travel industry sees recovery receding amid new coronavirus fear – .

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Travel industry sees recovery receding amid new coronavirus fear – .


  • Airlines Count Cost of Omicron Virus Variant
  • Discovery could delay recovery by a year – HSBC
  • Some travelers cancel or delay reservations
  • Stocks rebound after sharp drop on Friday

Nov. 29 (Reuters) – Airlines are working to limit the impact of the latest variant of the coronavirus on their networks, as delays in bookings threaten an already fragile recovery in global tourism.

Airlines shares rebounded along with the rest of the market on Monday after falling sharply on Friday when the discovery of a new coronavirus mutation weighed heavily on stocks.

After a weekend of sudden border restrictions and route suspensions, analysts said the industry nervously waits for scientists to assess the seriousness of the Omicron variant – and prepare to wait even longer to fix its finances bruised.

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“The hope for US and European carriers was that the opening of the Atlantic would allow them to operate long-haul routes on a cash-positive basis, but border restrictions make it even more difficult to access the asks, ”said James Halstead, managing partner in aviation strategy consulting.

The latest outbreak, first reported in southern Africa, hit the industry hard as it envisioned a recovery, especially after travel to the United States eased.

HSBC has said it will delay the industry’s recovery by a year.

Those on the front lines include interconnected Gulf carriers and airlines like Lufthansa (LHAG.DE), which relies heavily on transit traffic at its base in Frankfurt, analysts say.

Major carriers have acted quickly to protect their hubs by limiting passenger travel from southern Africa, fearing that a spread of a new virus could trigger restrictions from other destinations beyond immediately affected regions, industry sources said.

“Your entire network is at risk when running a hub,” Halstead said.

DELAYED BOOKINGS

Singapore has postponed plans to open its borders to vaccinated travelers from the United Arab Emirates, Qatar and Saudi Arabia, as those countries are transit hubs for travel to Africa.

Singapore Airlines (SIAL.SI) said it has converted some of its flights to Johannesburg and Cape Town to cargo flights only.

Qatar Airways has said it will no longer accept passengers traveling from five southern African countries, but will carry passengers to those countries under current restrictions.

Southern Africa, where Omicron was first detected, accounts for only a tiny fraction of international travel around the world, but Israel and Japan have announced border closures to all foreign travelers and Britain and Australia have tightened the rules for all arrivals in response to the new variant. Read more

Concerns were also expressed about future bookings.

Some Australian travelers booked through Flight Center Travel Group Ltd (FLT.AX) have canceled or delayed trips due to new requirements for arrivals to isolate at home or hotel for 72 hours while awaiting test results COVID-19, a spokesperson for the travel agency said. Read more

“It’s still very early days and people are generally willing to wait and see what will happen. “

The Australian border remains closed to tourists from all countries except New Zealand and Singapore.

In Germany, DER Touristik said after very positive bookings in early fall, it had seen a reluctance to book, including for southern African destinations.

Jeremiah Wong, senior director of marketing communications at Chan Brothers Travel in Singapore, said some concerned customers had called to inquire about options for future trips to Australia due to the new isolation requirement.

“Right now, the reality is that people still want to continue with their travel plans because they have been planning it for a long time,” he said. “We have not received any calls of concern for tours in Europe. “

Some companies seemed exasperated by the latest threat to the status quo, just as the industry gained a break.

“It is too early to make any predictions,” said a spokesperson for Spanish airline Iberia, owned by IAG (ICAG.L).

“When it comes to contingency plans, does the flexibility and adaptability that we have shown throughout the pandemic seem insignificant to you? “

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Reporting by Jamie Freed in Sydney and Chen Lin in Singapore, Tommy Lund in London, Clara-Laeila Laudette in Madrid, Ilona Wissenbach in Frankfurt, Tim Hepher in Paris Editing by Shri Navaratnam and Mark Heinrich

Our Standards: Thomson Reuters Trust Principles.

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