• Thu. Aug 4th, 2022

Reasons the airline industry is optimistic for 2022, despite Omicron | To analyse

Just as the emergence of the Alpha variant of Covid-19 in late 2020 dampened hopes of a strong upturn in air traffic in the new year, the Omicron variant plays the same trick at the end of 2021.

Developments in recent days show that Omicron is likely to have a significant short-term impact on airline finances as governments reimpose border restrictions and people reconsider their travel plans.

In Asia, the major markets that had led the region’s reopening – such as Singapore and Thailand – have retreated.

And in North America, the Canadian government, for example, has urged citizens to avoid non-essential travel outside the country.

In Europe, detailed estimates of the potential impact of Omicron are emerging. Ryanair, for example, expects traffic for January to be around 6-7 million passengers, he said on December 22, as it cut capacity for the month by a third. It expected to carry around 10 million passengers in January.

The aggressive reintroduction of Ryanair’s capacity has arguably taken it down further, but that fact won’t be very comforting to other carriers, who will also notice that the Irish operator is better placed than most to absorb more financial woes.

There is still strong reason to believe that 2022 can be significantly better than 2021 for the airline industry, however, once the Omicron wave subsides.

First, early data suggests that existing vaccines continue to offer high levels of protection against serious disease and that other key treatments for Covid-19 are still working. This, perhaps, bodes well for future variants of the disease, potentially meaning governments might not curb displacement as quickly.

Second, encouraging preliminary data on the severity of the illness caused by Omicron has emerged in recent days, supporting earlier accounts from South Africa. An important caveat is that the higher transmissibility of the variant means that it still risks jeopardizing the capacity of health services in the weeks to come. But this higher transmissibility could also mean that waves of the virus are abating faster than what has been seen with other variants, as data in South Africa is starting to suggest.

Ultimately, the airline industry may not be where it hoped to be, even a month ago, as 2022 approaches. But in a pandemic that promised more setbacks, it may It is encouraging that the latter may turn out to be part of an inevitably turbulent journey, one in which the industry manages to stay the course of the recovery.