Airlines around the world are preparing for instability due to the Omicron mutation

Airlines around the world are preparing for more instability due to the variant Omicron of COVID-19, which could force them to change programs and destinations at the last minute and rely more on domestic markets where possible, according to analysts.

Many travelers have already booked travel for the Christmas season, which is a high season for airlines, but there are growing concerns in the industry about pausing in future bookings and further delays in the already slow recovery in business travel.

Fitch Ratings has announced that it is revising its forecasts for global passenger traffic for 2021 and 2022, with the emergence of new executives such as Omicron highlighting the possibility that conditions will remain volatile for airlines.

“It’s a bit like we’re back to where we were a year ago, and that’s not a good prospect for the industry, and not just for it,” Dirdre Falton, a partner at MIDAS Aviation, told an online industry seminar today.

Omicron’s impact will vary by country and region due to the way each government manages and the different nature of airlines around the world as well as their business models.

Japan Airlines and ANA Holdings today suspended new bookings for international flights arriving in Japan until the end of December as the country tightens border controls.

Hong Kong-based Cathay Pacific Airways, which has no domestic market and operates at only 10% of its pre-pandemic capacity, said it was too early to assess Omicron’s impact on demand.

Airlines in countries with large, strong domestic markets, such as the US, China and Russia, are better shielded from the greater uncertainties of international travel.

UBS analysis shows that US airlines have not yet changed their planned capacity, which in December is at 87% of 2019 levels and is expected to reach 92% of pre-COVID capacity in January.

United Airlines is launching the Newark-Cape Town route today despite a ban on non-US citizens from South Africa entering the United States, while Delta Air Lines has announced that reservations for the Christmas season are strong.

“Last year, every new executive saw a drop in bookings, but then an increase, as soon as the escalation escalated. We expect the same pattern to emerge,” said Helen Becker, an analyst at Cowen and Co.

Travel booking site Kayak reports that searches for international travel from the US fell just 5% on Sunday – in stark contrast to the 26% drop in searches in the UK, which had tightened the diagnostic framework for arrivals. .

Major European airlines are much more dependent on international travel than their American counterparts, which puts them at increased risk for the Omicron variant.

In Asia, countries such as Australia, Japan, Singapore and Thailand had just begun to carefully lift border restrictions in recent weeks, and passenger numbers continued to be just a fraction of pre-pandemic levels before Omicron was discovered.

John Grant, chief analyst at travel data company OAG, said the measures imposed by Japan and Australia to delay the entry of some foreigners because of Omicron were “sad and disappointing” but the corresponding impact on travel is ” relatively insignificant “.

Airlines around the world are becoming more flexible in adapting their schedules and destinations during the pandemic, and this is expected to continue, he added.