Good news on the vaccine front has had an immediate and tantalizing effect on the travel sector, suggesting many passengers are raring to get going again.
On Tuesday, the U.K.-based low-cost airline EasyJet issued results that were mostly gloomy—it posted its first annual loss, of $1.68 billion, in its quarter-century history. But it also pointed to a glimmer of hope.
When Pfizer and BioNTech announced their promising COVID-19 vaccine trial results last week Monday, said EasyJet CEO Johan Lundgren, the carrier’s bookings surged by 50%. According to Reuters, he added that the momentum continued this week Monday, when Moderna also announced a very high efficacy for its candidate vaccine.
Similar indications came last week from British travel comparison and booking websites.
Following the Pfizer/BioNTech trial-results announcement, Skyscanner said it saw a 48% week-on-week increase in searches for travel next spring and summer. The firm’s senior brand director, Jo McClintock, said the advances in vaccine development were “the single biggest factor in restoring traveler confidence.”
Meanwhile, TravelSupermarket.com saw a 54% week-on-week uplift on that first vaccine announcement, with spokeswoman Emma Coulthurst calling the news “the positive shot which the industry and travelers need.
“The weekend just gone saw a further increase in holiday searching and booking compared with the previous weekend,” Coulthurst said in an emailed statement.
‘Multiyear recovery’
It’s not hard to see why the announcements sent airline stocks soaring. However, there are two notable factors to bear in mind here.
One is that airlines are currently offering fantastic deals on flights next year, as they try to tempt people back into the air. So with even a hint that flying might be safe enough within that timescale, many people can afford to take a chance and book now.
The other thing to remember is that the vaccine announcements, in which the pharma firms hailed efficacy levels above 90%, mark only a first step toward a return to normality. Final trial results are still needed, then authorization by drug regulators, and then the mammoth task of producing and distributing the vaccines to billions of people around the world.
(On that last front, the International Air Transport Association [IATA] issued guidance to the air cargo industry Monday, to help it prepare for its role in handling and transporting vaccine doses at an unprecedented scale.)
In a Tuesday note, the investment bank Liberum said the vaccine announcements suggest there won’t be a “protracted or even indefinite period of having to live with the virus and its risks.” However, it wasn’t too bullish on the prospect of all passengers flocking back to terminals anytime soon.
“We still expect a multiyear recovery for demand, especially with the full economic fallout on household incomes and employment yet to be seen,” Liberum said.
Testing times
Vaccines will also be only one element of making flying safe again, albeit a major one. Speedy and effective coronavirus testing will also be important, and—while promising new testing developments lie just around the corner—today’s rapid antigen tests are not very reliable. (Just ask Elon Musk.)
Even considering those antigen tests, a level of political coordination will be needed to ensure that their results are trusted on both ends of a journey. And things aren’t looking great there.
Also Tuesday, Reuters reported that many EU governments oppose the establishment of common rules around rapid COVID-19 tests.
The situation leaves European airlines, which are using such tests for domestic flights, largely unable to deploy them for international routes.