International Travel Poised to Take Hit Due to Omicron
Omicron Threatens International Travel Recovery
The Omicron variant of COVID-19 is threatening recovery for international travel as the US, the UK, and other countries take new action to prevent it from spreading. This will hurt the likes of United Airlines (UAL), American Airlines (AAL), and Delta Air Lines (DAL), which were just emerging from a slump which has lasted nearly two years.
International travelers and American citizens coming into the US now have to provide a negative COVID-19 test administered within a day before departure. Vaccinated individuals are not exempt. Prior to the change, travelers could take a test three days prior to departure. In the UK, all international travelers have to have a PCR test. Meanwhile Japan, Israel, and Morocco have temporarily closed their borders to foreigners.
Delta, American, and United Were Just Starting to Recover
Omicron is coming just as American, and United, and Delta, which rely on international travel for a lot of their sales, are seeing a rebound. This fall the US lifted its travel restrictions, driving an uptick in bookings. Earlier this week United restarted direct flights from Newark, New Jersey, to Cape Town, South Africa—the country where the Omicron variant was first identified.
Despite the new variant, some airline companies are maintaining an optimistic outlook. United Airlines said this week it’s seeing an increase in cancelations, but it doesn’t expect the decline to be as bad as it was during the height of the Delta variant. General Electric Aviation said its airline customers are gearing up for a busy spring and summer.
US Travel Holds Up
International and business travel may take a hit because of Omicron, but so far domestic travel in the US has been a bright spot for airline operators. Many of the US carriers had their busiest days since the start of the pandemic during Thanksgiving week. Meanwhile, searches online for domestic flights in the US increased 21% this week.
Interest in domestic travel may not last long if Omicron rapidly spreads throughout the US. As it stands, the threat from Omicron is already prompting some economists to lower their outlooks for the airline industry this year and beyond.
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