Across the pond28 December 2021
The return of transatlantic routes has helped boost the recovery of air travel in the second half of 2021, as a number of airlines aim to capitalise on easing travel restrictions. However, much remains to be done to fully unlock these routes and bring about the return to pre-Covid numbers. Abi Millar speaks to Thomas Reynaert, managing director at Airlines for Europe (A4E), and other industry experts, to find out more about what the return of transatlantic flights means to the industry and passengers.
More than 18 months into the pandemic, the global travel industry reached a milestone. On 8 November, for the first time since the start of the pandemic, non-essential air travellers from 33 countries were allowed to enter the US.
While there are still some restrictions in place – travellers must be fully vaccinated and show proof of a negative Covid-19 test taken in the three days prior to arrival – the border is once again open. Tourists from the 26 EU Schengen countries are now welcome in the US, along with those from the UK, Ireland, China, India, Iran and Brazil.
“The lifting of the travel ban on 8 November is really good news for families and friends who have been separated for far too long. It’s equally good news for business travel and for the struggling tourism sector,” says Thomas Reynaert, managing director at Airlines for Europe (A4E), an airline association founded by the EU’s five largest carriers that now represents 16 leading airline groups as well as global manufacturers. “We expect a progressive recovery of the transatlantic market, with our members Air France-KLM, Lufthansa Group, IAG, Finnair and Icelandair all providing flights to the US.”
Although airlines have found inventive ways to pull through this period, the closure of the EU-US travel corridor represented an undeniably huge blow to the sector. Before the pandemic, transatlantic flights were worth around £9bn in revenue to airlines on both sides of the Atlantic. Since then, they have dropped to around one-quarter of their normal volumes.
This has been particularly challenging for the likes of British Airways, which has long placed transatlantic flights at the cornerstone of its business model. Its London Heathrow to New York JFK service – once the world’s only billion-dollar route – fell from glory as business travel all but ground to a halt.
Friction over less travel
Virgin Atlantic struggled too. Pre-pandemic, long-haul flights to the US accounted for 70% of its seating capacity. As the world locked down, the airline was forced to halt its scheduled passenger flying for three months and switch to a freight-only operation.
Later in the pandemic, with holidaymaking out, airlines shifted their focus towards passengers looking to visit friends and family. Virgin Atlantic responded by opening three new routes to Pakistan, tapping into demand from the UK’s south Asian diaspora.
“This launch was the first time we have added three routes to a completely new country, demonstrating the need to be bold with our network and schedule plans during the pandemic,” says a Virgin Atlantic spokesperson. “We have had to be flexible and agile, changing our business model to jump on opportunities in order to survive.”
In the early days of the pandemic, the closure of the transatlantic corridor was little contested. However, as we moved through 2021, the policy started to ruffle feathers on both sides of the Atlantic – especially as Europe reopened its own borders to US citizens.
European leaders pointed to their high vaccination and low infection rates, both of which compared favourably with many countries the US hadn’t banned. At the same time, the US travel industry was feeling the pinch. According to an estimate from the US Travel Association trade group, the US restrictions would have cost the country’s economy $325bn if they’d run until the end of 2021.
Heathrow Airport, the UK’s busiest, called upon the government to step up negotiations. The airport has been badly hit by the drop in air travel, having haemorrhaged around £3bn since the start of the pandemic. The US travel ban has been an important piece of that puzzle. Between April 2020 and March 2021, the number of Heathrow passengers going to or from North America dropped by 95.5%.
“With fully vaccinated US visitors now able to travel to the UK without the need to quarantine, the joint UK/US travel taskforce must capitalise on the UK’s world-leading vaccine rollout and reach a reciprocal agreement for fully vaccinated UK travellers,” said an airport spokesperson in July 2021.
Back up and operating
The easing of restrictions, then, was met with relief on all sides. When the reopening was announced in September, airlines witnessed an unprecedented surge of customer demand.
“Following the announcement of the much-anticipated reopening of the transatlantic corridor, bookings to the US increased by over 600% overnight, compared with the same time the previous week,” says the Virgin Atlantic spokesperson. “New York had the most bookings of any US city overnight. Leisure destinations were also performing well, suggesting holidaymakers are ready for a much-needed break, with Orlando flights up 11-fold, Miami ninefold and Las Vegas eightfold.”
Anticipating a renewed appetite for long-haul travel, the carrier has launched a number of Caribbean routes, including Heathrow to the Bahamas and Edinburgh Airport to Barbados. The latter will be Scotland’s only direct gateway to the Caribbean, and marks the first time Virgin Atlantic has flown international flights from the Scottish capital.
“We wanted to demonstrate our continued commitment to the Caribbean region, and to meet an increase in customer demand, by expanding our Caribbean portfolio,” the spokesperson adds. “Our new services aim to respond to the pent-up demand from consumers looking to head off on relaxing holidays to sunny Caribbean destinations.”
Several budget airlines, keen for a slice of the pie, are also looking to enter the lucrative transatlantic market. JetBlue, the sixth-largest airline in the US, launched its New York to London service in August, and now sees two flights a day from New York to Heathrow and Gatwick Airports. CEO Robin Hayes has said JetBlue wants to have a “disruptive and permanent effect” on long-haul travel.
“As the UK opens to travellers coming from America, our flights are well timed to meet the pent-up demand for travel between our two countries. We look forward to welcoming UK travellers to the US soon and launching service between Boston and London next year,” he continued.
Another contender is Norse Atlantic Airways, a Norwegian start-up expected to take to the skies by the second quarter of 2022. The carrier will focus exclusively on low-cost transatlantic flights, which in the first instance will fly from Oslo, London and Paris to New York, Los Angeles and Fort Lauderdale.
According to CEO Bjorn Tore Larson, the airline will be positioning itself more for leisure travel than for business. “Our typical traveller won’t necessarily be the typical businessman going from A to B. It will be to a greater extent the family of four going for a long vacation to Florida, or a week to New York, or visiting friends and family, students. So, we will ensure that travel is affordable for more people than it is today,” he told journalists in August 2021.
A question of confidence
It seems that for anyone looking to travel to and from the US, the airlines themselves are more than ready. The big unknown remains the passengers. For sure, many EU citizens – not least those with loved ones in the US – will have booked transatlantic flights at the earliest opportunity. But what about the holidaymakers and business travellers who would have flown pre-pandemic, but might have reservations in our current climate?
Reynaert remarks that anticipating air travel demand is a complex process, even in non-Covid times, and that today’s unprecedented circumstances are making that even more challenging than normal.
“EU citizens are eager to start travelling again, but ensuring confidence that the rules will remain stable is key in this context,” he says. “Our member airlines are also proposing flexible booking policies, and supporting travellers to make it easy to travel once again.”
He points out that, while A4E’s member airlines will continue to apply health and safety measures as long as needed, different countries need to align their requirements and provide certainty to passengers.
“Travellers want to avoid quarantine when they return home, so we need the rules to be clearly established and communicated to passengers in advance,” he says. “We have repeatedly demonstrated that with the numerous measures in place, flying remains a safe way to travel.”
According to the European Centre for Disease Prevention and Control (ECDC), the EU’s travel restrictions haven’t had a significant impact on Covid cases, hospitalisations or deaths. If this line of thinking filters through to the average traveller, there’s every chance of restoring stability to this badly shaken market.
Raynaert thinks it’s too soon to say how much air traffic will recover, especially factoring in non- Covid-related woes like rising oil prices, increasing infrastructure costs and low load factors.
“Although recovery in international air travel will be uneven, we hope that business travel will see some rebound in 2022,” he says. “For European airlines we certainly don’t expect a full recovery on transatlantic flights in 2022, but much will depend on the evolution of the pandemic and whether vaccination continues to protect us collectively.”
The Virgin Atlantic spokesperson is more sanguine about prospects, remarking that the reopening of the transatlantic corridor marks an important step in our collective recovery from the pandemic.
“The UK will now be able to strengthen ties with our most important economic partner, the US, boosting trade and tourism as well as reuniting friends, families and business colleagues,” they say.
What 2022 will look like is impossible to predict. But the smart money says we’ll see brighter times for carriers and would-be passengers on both sides of the Atlantic.
The value of transatlantic flights to airlines on both sides of the Atlantic before the pandemic.
The drop in Heathrow passengers travelling to or from North America between April 2020 and March 2021.