Airlines, Travel Industry React to Latest Travel Restrictions

It was, to say the least, an extraordinary day on Wednesday as the country continues to grapple with the spread of COVID-19.

The virus touched virtually every aspect of life in one incredible eight-hour span.

– The National Basketball Association abruptly suspended its season after the final game on Wednesday after a player from the Utah Jazz had a preliminary positive test for the coronavirus.

– New York City officials canceled the revered St. Patrick’s Day Parade on Fifth Ave, the first time in 258 years. The parade is so established it is older than the United States.

– In Chicago, there will be no pub crawl and no dyeing the Chicago River green – the city also canceled its annual St. Patrick’s Day parade.

– The National Collegiate Athletic Association announced that its wildly popular men’s and women’s basketball tournaments – three weeks known as ‘March Madness’ – will still be played but no fans will be permitted inside any arena during the length of the tournament.

All of those affect travel in one way or another.

But perhaps the most startling news – and certainly the most troubling to the airline industry – came during President Trump’s address to the nation from the Oval Office on Wednesday night. To combat the spread of the virus in the U.S., and on the heels of the World Health Organization declaring COVID-19 a global pandemic, the president has suspended travel from 26 European countries to the United States starting at midnight on Friday, March 13. The United Kingdom was not part of the banned nations.

Immediately, the reaction has been palpable.

U.S. stock futures plummeted overnight, falling more than 1,000 points or 4.6 percent. When the markets opened this morning at 9:30 EDT, the Dow Jones dropped more than 1,700 points and within six minutes the so-called “circuit breaker” implemented by the New York Stock Exchange to temporarily halt trading for 15 minutes kicked in.

Not that they have a choice, but the airlines all said they will comply with Trump’s directive.

“At this point, all I can say is that we will comply with the administration’s announcement,” United Airlines spokesman Frank Benenati told CNN.

“The safety and health of our customers and employees is always our highest priority,” said Delta Air Lines spokeswoman Elizabeth Ninomiya in a statement. “Delta has and will continue to quickly make adjustments to service, as needed, in response to government travel directive.”

American Airlines said it is in contact with government officials to further understand and comply with the directive.

The airlines are expecting a precipitous drop in business and Trump talked about making financial help available from the government along the lines of the bailout after the Sept. 11, 2001 attacks. He did not elaborate, however.

The transatlantic routes for airlines are among the most lucrative, something Airlines For America President and CEO Nicholas E. Calio said in a statement. Airlines For America is the umbrella lobby group for the airline industry.

While commending Trump for his “decisive action,” Calio said “the unforeseen outbreak of the coronavirus has directly impacted the U.S. airline industry, which is critical to the U.S. and global economies. This action will hit U.S. airlines, their employees, travelers and the shipping public extremely hard. However, we respect the need to take this unprecedented action and appreciate the Administration’s commitment to facilitate travel and trade.”

According to the International Air Transport Association (IATA), the aviation industry could lose around $63 billion if the viral infection is contained in the countries currently experiencing confirmed cases.

Ralph Hollister, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, said a travel ban now might be too little too late.

“A travel ban may be too little too late now that the virus is spreading throughout the global population,” he said. “Additionally, the disruption from this ban will cause a significant impact on the US travel sector. US travel intermediaries, hotels and airports are examples of industries that will be heavily disrupted. US airlines may be the first to feel a significant impact, due to travel between North America and Europe providing a valuable revenue stream.”

Roger Dow, President and CEO of the U.S. Travel Association said that the government must now consider equally aggressive steps to financially bolster the industry. House Democrats did introduce a multi-billion dollar bill in response to the outbreak following the president’s speech.

“Temporarily shutting off travel from Europe is going to exacerbate the already-heavy impact of coronavirus on the travel industry and the 15.7 million Americans whose jobs depend on travel,” Dow said. “We have and will continue to engage Congress and the administration on policy steps that are necessary to ensure that travel employers—83% of which are small businesses—can keep the lights on for their employees.”

According to U.S. Travel Association economists, 850,000 international visitors flying from Europe (excluding the UK) entered the United States in March of 2019, accounting for about 29% of total overseas arrivals to the U.S. These visitors spent approximately $3.4 billion in the U.S.

Trump’s decision on the 30-day ban also sent Europe into a tailspin. MotherJones reported this morning that Paris’ Charles de Gaulle International Airport was swamped with Americans and others trying to get out of France on flights to the U.S., with one person paying $3,300 for a one-way coach set from Paris to Phoenix. And a Delta ticket agent said one person spent $20,000 online in tickets to get home to the U.S.

Needless to say, the European Union was not thrilled with Trump’s decision.

“The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” European Council President Charles Michel and European Commission President Ursula von der Leyen said in a joint statement. “The coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action.”

According to flight tracker FlightAware, around 400 flights across the Atlantic from Europe to the United States each day.

Terry Dale, President & CEO of the United States Tour Operators Association, said while he understands and appreciates the urgency to curb the growth COVID-19 within the United States, “we were surprised and discouraged by the Administration’s announcement of the 30-day travel ban with Europe. It adds more confusion and uncertainty to our already beleaguered industry.”

In the meantime, Walt Disney World in Florida and Disneyland in California continue to hold out and have not closed the parks. In fact, Executive Chairman Bob Iger said at the company’s annual shareholder meeting this week that staying open is what the country needs.

“It’s fair to say we’re all sobered by the concern that we feel for everyone affected by this global crisis,” Iger said in prepared remarks. “These are challenging times for everyone. (But) what we’ve demonstrated over the years is that we’re incredibly resilient. If you think about the world today, what we create has never been more necessary or more important.”

In a statement, the American Society of Travel Advisors (ASTA) said it is “diligently working with policy makers in both the Trump Administration and in Congress to obtain a variety of relief options to help advisors, and the travel industry as a whole, weather this storm. We will, of course, keep ASTA members fully apprised of the latest developments in this rapidly evolving situation.”

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