Mutant virus
deflates year-end rush for airlines, hoteliers‘We knew it would be bad, it just turns out
it’ll be very bad’
A brutal ending is taking shape for what’s
already been a lost year for Europe’s travel industry, as Covid-19 administers
a final kick to airlines, innkeepers and travelers alike.
A mutant strain of the coronavirus spreading rapidly in the
U.K. led Prime Minister Boris Johnson to clamp down on holiday visits at home
and abroad over the weekend. Italy, the Netherlands and Belgium were among the
countries closing their borders to the former European Union state, with others
preparing to follow suit.
Airlines
that were seeing a glint of the typical holiday bustle are now canceling
flights or sending planes out empty so stranded Brits can return. U.K.
hoteliers and operators of holiday lets are coming up empty during one of the
busiest times of the year. Train operators contended with chaos over the
weekend amid a rush to leave London, while travelers hoping to squeeze in a
visit to family or a sunny getaway are spending time on the phone seeking
refunds.
“Fundamentally no one expected winter to be good,” Citigroup analyst Mark
Manduca said of the airline industry’s year-end swoon. “We knew it was going to
be bad, it is bad, it just turns out it’ll be very bad.”
Setback
for Airlines
The U.K. was Europe's top air-travel market before
Sunday's lockdown
Source: Eurocontrol, based on Dec. 19 flights
In coming days, thousands of flights are likely to
be canceled.
Before the latest lockdowns, airlines anticipated offering just under a million
seats this week between the U.K. and western Europe, said Anne Correa, vice
president for airline and airport services at consulting firm Morten Beyer
& Agnew. While that’s down by more than two-thirds from a year ago, the run-up to Christmas was supposed to
be one of the few bright spots for the industry this year.
Ryanair
Holdings Plc and EasyJet Plc
will see the biggest immediate impact, she said, given they sell 49% of the
seats between the U.K. and Europe.
“These bans are going to lead to the disruption of travel
plans for thousands of travelers and the loss of peak revenues for the
airlines,” said John Strickland of JLS Consulting.
Bearing the
Brunt
Who pays is often dependent on the fine print of plane and
train tickets that few read until a crisis hits. On social media, customers
engaged in refund battles with airlines,
train operators and ticket brokers.
Some airlines like EasyJet quickly said they’ll offer cash refunds to customers
whose travel was disrupted, while IAG SA’s British Airways and
long-haul specialist Virgin Atlantic
Airways Ltd. said they’ll limit compensation to vouchers or waive change
fees.
Irish discounter Ryanair said Sunday it’ll provide refunds
where EU countries ban travel between Dec. 20 and Dec. 24, but not to other
countries to which the airline is permitted to fly.
Stranded
Travelers
Beyond the damage to their wallets, would-be travelers
found their plans dashed. Twitter user Franchesca_3
said she was unable to board a flight from Britain to Sweden, where she is
moving, on Sunday because it would stop in Amsterdam, where the Netherlands had
prohibited U.K. arrivals. She said she’s hoping to get to her destination
before Sweden follows with its own ban.
Those thwarted trying to leave
the U.K. risk being stranded without a place to stay. The Premier Inn Wimbledon
Broadway in south London said it was open but anyone booking a room must prove
they are there for a legitimate reason such as business, by showing a letter or
email.
Operators of small holiday lettings were also out of
pocket. Airbnb told
customers they should get a refund if travel is restricted, under a
policy put into place before the latest rules were enacted.
Cottages.com, Britain’s biggest provider of self-catering
accommodations, told proprietors it was contacting all guests who live in a
Tier 4 area -- including London and much of southeast England -- to cancel
reservations and offer a later booking or refund.
Scotland will move to Tier 4, the most severe U.K. lockdown
category, from Dec. 26 through at least mid-January, while in Wales, all
holiday accommodation must close, Cottages.com said.
Trains and
Cabs
Rail stations serving express routes out of London were
packed on Saturday night amid an exodus ahead of the new rules. Some travelers
rented cars or booked taxis for journeys spanning hundreds of miles to flee the
capital and be with loved ones for the holidays.
Eurostar
International Ltd. said it will refund passengers unable to travel on its
trains through the Channel Tunnel, though the impact will be limited by demand
already running at less than 30% of the usual Christmas level became of
previous curbs.
Manduca, the Citigroup analyst, said the chaos at year-end
would likely have a knock-on effect, causing some travelers to delay making
bookings in the early part of the year for summer travel.
While he expects negative sentiment on airline stocks in
the short-term, he said low-cost carriers such as Ryanair could benefit from
pricing power when travel snaps back. Airlines have become more nimble with
costs and can more easily adapt to shorter booking lead-times, he said.
“I don’t think it’ll have a big impact on the
fundamentals,” he said. “Summer may be quite good.”
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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