17
Aug

Balancing risk and reward – UK’s new travel restrictions on arrivals from Spain illustrates that kick-starting travel will be painful process for travellers

The number of global cases of Covid-19 are rising faster than ever as infections across the Americas continue to increase. But right behind it Europe is bracing itself for a second wave of infections as clusters of infections are being increasingly seen across the Continent.

The decision this past weekend by the UK government to require all arrivals from Spain to complete a 14-day quarantine when they arrive in the country highlights how fluid the current situation is. The new travel restriction was introduced with just hours notice as many UK citizens were just jetting out to destinations across Spain’s mainland and popular holiday islands under the illusion they were relatively safe from risk and enjoying the ability to use one of the many airbidges for international travel that have been established.

It is true to say that areas in Spain are seeing a rise in Covid-19 infections and similar situations are evident across other European nations, including France and Germany. The what has been described by observers as “heavy-handed tactics” from the UK government underlines that fine line that exists between balancing risk and reward along the recovery path.

Border restrictions have been generally lifting, but the approach taken to reopening varies hugely between regions and by country. This will determine the shape of the recovery and in Europe at least it is clear that many nations are on a mission to save the summer, a trading period that is key to businesses across more than just the hospitality and travel and transport sectors.

Right now though there remains a clear divide between capacity and demand. Europe’s airlines continue to grow capacity in the market, continuing the climb from Apr/May-2020, when the underlying trend was approximately -90% below 2019 levels. Last week Europe’s total capacity was scheduled to be 13.3 million seats in the week commencing 20-Jul-2020 – the highest since mid Mar-2020. Alternatively, the year-on-year reduction of -63.8% is the narrowest since mid Mar-2020.

But, traffic data shows demand is still not returning in line with capacity. In early Jul-2020 ACI Europe cut its forecast of passenger growth for this month from -70% to -81% year-on-year. This was based on early indicators of traffic for the month. Those early indicators must have been significant to see a -14% readjustment.

READ MORE via The Blue Swan DailyBalancing risk and reward – UK’s new travel restrictions on arrivals from Spain illustrates that kick-starting travel will be painful process for travellers