B U S I N E S S
Edited by
James E. Ellis and
Benedikt KammelBloombergBuJust a month ago, airlines around the world began
adding flights as lockdowns eased and people
craved escape. But as the travel season reaches
what should be its annual peak, hopes for an indus-
try comeback have been dashed by flareups of the
pandemic in Asia, a deepening health crisis in the
Americas, and the reimposition of flight curbs in
Europe. With optimism about a quick rebound
gone, the aviation world is increasingly resigned
to years of depressed demand.
Airlines are now rethinking plans to restore their
schedules and facing a jump in bankruptcies. It’s
also forcing a reassessment of just how long travel
will take to return to normal, with the International
Air Transport Association predicting that last year’s
traffic probably won’t be matched until 2024, a
year later than previously estimated. “The situa-
tion is deteriorating,” IATA Chief Economist Brian
Pearce says. “Airlines are having to take on costs,
but demand and revenues are not rising as quickly
as was expected, so they’re still burning cash.”
The difficulty airlines are having planning even
days ahead was illustrated when Britain on July
abruptly reimposed a 14-day quarantine for people
arriving from Spain after a surge in Covid-19 cases
in the Catalonia region. TUI AG, the world’s biggest
tour operator, responded by scrapping all package
holidays for Britons in Spain—previously their No. 1
destination—until the middle of August.
Fresh emergency measures imposed across the
Asia-Pacific region, where international flights were
first to return, suggest spontaneous clampdowns
may be the shape of things to come. A so-called
travel bubble allowing unfettered service between
Australia and New Zealand is on hold for months,
after a flareup in infections put Melbourne into lock-
down and triggered a disaster declaration in the
state of Victoria. The Philippines has halted non-
essential overseas trips just a month after resuming
service, and Hong Kong now requires some visitors
to prove they’ve tested negative for the coronavirus.
In the U.S., a burgeoning recovery in demand has
been squashed by a leap in cases, with many statesThe Aborted
Airline Takeoff
○ Early signs of recovery have
been stalled by Covid flareups
during prime travel seasonusinessweek August 1 0, 202010