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E.U. Barring U.S. Visitors a ‘Huge Deal’ for Airlines | E.U. Barring U.S. Visitors a ‘Huge Deal’ for Airlines |
(8 days later) | |
Delta Air Lines was hoping to restart flights next month from New York to Athens and Lisbon, two popular summer destinations, but it will probably have to wait a little longer. | Delta Air Lines was hoping to restart flights next month from New York to Athens and Lisbon, two popular summer destinations, but it will probably have to wait a little longer. |
The European Union is planning to bar most Americans even as it welcomes travelers from more than a dozen other countries next week, dealing a blow to Delta and other airlines hoping to revive their business as travel across the Atlantic Ocean typically peaks. | The European Union is planning to bar most Americans even as it welcomes travelers from more than a dozen other countries next week, dealing a blow to Delta and other airlines hoping to revive their business as travel across the Atlantic Ocean typically peaks. |
International flights make up a minority of flights for U.S. airlines but are typically much more profitable than domestic ones. And flights to and from Europe are generally the most important. U.S. and European airlines had reduced the number of available seats on flights connecting the two markets by about 75 percent next month compared with last July, according to the aviation data provider OAG. A travel ban on Americans, which European Union officials confirmed on Friday, will probably lead to even deeper cuts. | International flights make up a minority of flights for U.S. airlines but are typically much more profitable than domestic ones. And flights to and from Europe are generally the most important. U.S. and European airlines had reduced the number of available seats on flights connecting the two markets by about 75 percent next month compared with last July, according to the aviation data provider OAG. A travel ban on Americans, which European Union officials confirmed on Friday, will probably lead to even deeper cuts. |
“It’s a huge deal,” said John Grant, a senior analyst at OAG. “It is by far the jewel in the crown for many major airline networks, in terms of both revenue and profitability.” | “It’s a huge deal,” said John Grant, a senior analyst at OAG. “It is by far the jewel in the crown for many major airline networks, in terms of both revenue and profitability.” |
Last year, flights across the Atlantic, to Europe and other destinations, accounted for about 17 percent of passenger revenue for United Airlines, or about $7.4 billion. Such flights generated about 15 percent of all passenger revenue for Delta, or $6.4 billion, and about 11 percent of passenger revenue, or $4.6 billion, for American Airlines. They were particularly important to United and Delta, generating a quarter of passenger profits last year, according to the Transportation Department. | Last year, flights across the Atlantic, to Europe and other destinations, accounted for about 17 percent of passenger revenue for United Airlines, or about $7.4 billion. Such flights generated about 15 percent of all passenger revenue for Delta, or $6.4 billion, and about 11 percent of passenger revenue, or $4.6 billion, for American Airlines. They were particularly important to United and Delta, generating a quarter of passenger profits last year, according to the Transportation Department. |
[Here’s what you need to know about the EU’s travel ban on the US.] | [Here’s what you need to know about the EU’s travel ban on the US.] |
Tens of millions of people flew between the United States and European Union countries in 2019. Many traveled for business to and from cities like New York, Los Angeles and San Francisco and Amsterdam, London, Paris and Frankfurt. Many others fanned out farther to vacation, particularly in the summer, when international flights are often nearly full as American families jet off to Italy and Greece, and Europeans check out New York and California. | Tens of millions of people flew between the United States and European Union countries in 2019. Many traveled for business to and from cities like New York, Los Angeles and San Francisco and Amsterdam, London, Paris and Frankfurt. Many others fanned out farther to vacation, particularly in the summer, when international flights are often nearly full as American families jet off to Italy and Greece, and Europeans check out New York and California. |
Of course, travel between the United States and the European Union has been restricted since March, when governments on both sides of the Atlantic barred most visitors to prevent the spread of the coronavirus, with exceptions for repatriations and “essential” travel by medical professionals. | Of course, travel between the United States and the European Union has been restricted since March, when governments on both sides of the Atlantic barred most visitors to prevent the spread of the coronavirus, with exceptions for repatriations and “essential” travel by medical professionals. |
At the time, the United States had just over 1,100 coronavirus cases as the virus spread extensively in Italy and Spain. Today, the United States leads the world with more than 2.4 million cases, and infections are surging in Arizona, California, Florida, Texas and other states. As a result, European Union officials have decided to keep Americans out — along with travelers from dozens of other countries — for fear that they could further spread the virus. | At the time, the United States had just over 1,100 coronavirus cases as the virus spread extensively in Italy and Spain. Today, the United States leads the world with more than 2.4 million cases, and infections are surging in Arizona, California, Florida, Texas and other states. As a result, European Union officials have decided to keep Americans out — along with travelers from dozens of other countries — for fear that they could further spread the virus. |
Because of the size of the United States, a vast majority of tickets sold by American carriers are for domestic travel. Those flights have led the industry’s recovery, as Americans slowly start to visit friends and family and make limited vacation plans, a pattern unfolding in countries around the world. Higher-profit business and international travel is expected to follow far behind. | Because of the size of the United States, a vast majority of tickets sold by American carriers are for domestic travel. Those flights have led the industry’s recovery, as Americans slowly start to visit friends and family and make limited vacation plans, a pattern unfolding in countries around the world. Higher-profit business and international travel is expected to follow far behind. |
“I think international travel is probably going to lag domestic by up to 12 months,” Ed Bastian, Delta’s chief executive, told shareholders on a call last week, citing travel bans around the world as one reason. | “I think international travel is probably going to lag domestic by up to 12 months,” Ed Bastian, Delta’s chief executive, told shareholders on a call last week, citing travel bans around the world as one reason. |
The large difference in demand for domestic and international travel is also reflected in flight schedules. American, for example, plans to operate about 55 percent as many domestic flights next month as it did last July, but only about 20 percent as many international flights. The airline has delayed restarting service between the United States and a number of European destinations until August, a month later than planned. | The large difference in demand for domestic and international travel is also reflected in flight schedules. American, for example, plans to operate about 55 percent as many domestic flights next month as it did last July, but only about 20 percent as many international flights. The airline has delayed restarting service between the United States and a number of European destinations until August, a month later than planned. |
“Demand is increasing, but those numbers, while they’re increasing, are still a fraction of what they were last year, particularly internationally,” Doug Parker, American’s chief executive, told shareholders this month. | “Demand is increasing, but those numbers, while they’re increasing, are still a fraction of what they were last year, particularly internationally,” Doug Parker, American’s chief executive, told shareholders this month. |
The International Air Transport Association called on governments this week to avoid quarantine measures that can discourage travel in favor of less severe measures, like asking sick passengers to stay home and increasing testing. | The International Air Transport Association called on governments this week to avoid quarantine measures that can discourage travel in favor of less severe measures, like asking sick passengers to stay home and increasing testing. |
After dropping to record lows in April, the number of people going through U.S. airport checkpoints is up to about 20 percent of last year’s levels, according to the Transportation Security Administration. That’s not nearly enough to sustain the nation’s largest airlines, which are losing tens of millions of dollars every day, but it has restored a sense of vitality to an industry ravaged by the pandemic. | After dropping to record lows in April, the number of people going through U.S. airport checkpoints is up to about 20 percent of last year’s levels, according to the Transportation Security Administration. That’s not nearly enough to sustain the nation’s largest airlines, which are losing tens of millions of dollars every day, but it has restored a sense of vitality to an industry ravaged by the pandemic. |
And while international travel could remain subdued for months, airlines have found other ways to drive revenue, including operating cargo-only flights, which are in high demand. | And while international travel could remain subdued for months, airlines have found other ways to drive revenue, including operating cargo-only flights, which are in high demand. |
“That’s going to stay in place until passenger demand starts to recover,” Scott Kirby, United’s chief executive, said at an investor conference last month. “So there’s an international hedge that cargo is going to stay strong until passenger demand recovers, and then passenger demand will take over for it.” | “That’s going to stay in place until passenger demand starts to recover,” Scott Kirby, United’s chief executive, said at an investor conference last month. “So there’s an international hedge that cargo is going to stay strong until passenger demand recovers, and then passenger demand will take over for it.” |