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Travellers squeezed as COVID-19 impacts continue

What would have been a merry summer turned out boring for many travellers as governments of various countries continued to impose various levels of restrictions, discouraging travel and tourism across the world.

Summer period is usually a time airlines are able to recoup losses incurred during the year, but this summer was different as government restrictions made it impossible to move passengers from one destination to another.

Apart from measures such as the mandatory wearing of facemasks in public, social distancing requirements and PCR tests within some hours before travel time, countries have also introduced stiff travel rules, making travel almost a nightmare.

UK restrictions

The UK, which remains one of the frequently visited destinations by Nigerians and other citizens across the world, introduced complex teeth-grinding rules. The British system rates countries by covid-19 risks and sets travel rules accordingly.

All UK arrivals must provide a negative test taken within the past 72 hours, and complete a Passenger Locator Form before arriving in the UK. A traffic light-based travel system- red, amber and green – is in place in England, Scotland, Wales and Northern Ireland.

Read Also: What you should know before visiting the UK

Non-UK residents from red list countries are currently refused entry to the UK.

British residents arriving home from red list destinations must undergo a 10-day hotel quarantine at their own expense.

Before arriving in the UK, these travellers must purchase what the UK government calls a “quarantine package,” covering the stay in hotel quarantine including food and drink while there.

Bookings must be made through this online portal. The charge for a single adult occupying one room for 10 days is now £2,285. Anyone dodging quarantine risks fines of up to £10,000.

UK residents who have been fully vaccinated via the UK vaccine program who are returning to England, Scotland, Wales or Northern Ireland from an amber country no longer need to quarantine.

These amber travellers must still do a pre-departure test and a PCR test on day two, but they no longer have to do a day eight test.

UK residents arriving back in the UK who are not fully vaccinated must continue to follow the original amber rules: take a pre-departure test, quarantine for 10 days and take a PCR test on day two and day eight of quarantine. These travellers who are arriving back in England can end their quarantine early via the Test to Release scheme.

UAE’s ban

Dubai, another top travel destination, also imposes levels of travel restrictions, forcing travellers to opt for other destinations. Since March, scheduled flights between Nigeria and the UAE have been stopped following a diplomatic row over COVID-19 protocol.

The UAE authorities had instructed Nigerian travellers at the Lagos and Abuja airports to take another PCR test on arrival in Dubai. But Hadi Sirika, the minister of aviation, criticised the decision and termed it “discriminatory profiling” of Nigerian travellers.

The UAE Government and the Government of Dubai have introduced international travel protocols that apply to citizens, residents, visitors and transit passengers.

For Abu Dhabi, the authorities have announced that from 20 August, only those with proof of vaccination can access public spaces, including beaches, hotels, schools and shopping malls. From 1 August, only those with proof of vaccination can access government buildings including customer service centres. This does not apply to those with a vaccination exemption status on the Al Hosn app or children aged 15 and under.

American policies also baffling

There are indications that the Biden administration is developing a plan to require nearly all foreign visitors to the United States to be fully vaccinated against COVID-19 as part of eventually lifting travel restrictions that bar much of the world from entering the United States.

The White House wants to re-open travel, which would boost business for the airlines and tourism industry, but is not ready to immediately lift restrictions because of the rising COVID-19 caseload and highly transmissible COVID-19 Delta variant, an official said.

The Biden administration has interagency working groups working to have a new system ready for when they can reopen travel.

Travel, tourism choked

All around the world, a jumble of rules cause confusion, choke tourism and leave businesses struggling to work out who can do what and go where. All of this means travel will remain out of reach for many and messy for all for some time. The chaos is unlikely to subside soon, as new outbreaks emerge and governments struggle to coordinate policies.

Travellers are forced to scour airport, airline and ministries’ websites to piece together the rules, so they are properly guided.

The confusion is made worse by governments taking very different approaches to travel. East Asia and Australasia are largely locked down. The poorest regions such as Sub-Saharan Africa are largely open. America and Europe are somewhere in-between.

All around the world, a jumble of rules cause confusion, choke tourism and leave businesses struggling to work out who can do what and go where

Airlines continue to count losses

The International Air Transport Association (IATA) expects net airline industry losses of $47.7 billion in 2021 (net profit margin of -10.4 percent). This is an improvement on the estimated net industry loss of $126.4 billion in 2020 (net profit margin of -33.9 percent).

“This crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases. There is optimism in domestic markets where aviation’s hallmark resilience is demonstrated by rebounds in markets without internal travel restrictions.

Government imposed travel restrictions, however, continue to dampen the strong underlying demand for international travel. Despite an estimated 2.4 billion people travelling by air in 2021, airlines will burn through a further $81 billion of cash,” Willie Walsh, IATA’s director general said.

IATA in 2020 had predicted that global airlines stand to lose $113 billion in sales if the coronavirus continues to spread. The airline stocks have also been seriously hit.

Amid the coronavirus spread, except cruise-liner stocks that were affected the most, the second most-hit is the airline sector. Shares of American Airlines Group Inc. continued to fall a few days in a row.

Southwest Airlines Co stock plummeted 4.20 percent to $43.35 in the premarket session while Delta Air Lines Inc stock was down 4.02 percent to $43.20. United Airlines Holdings Inc. stock was down 6.01 percent to $48.49.

In 2020, shares of Spirit Airlines Incorporated, Hawaiian Holdings Inc and American Airlines Group Inc. were down around 40 percent, and many other airline stocks were not far behind.

Plans for a restart

IATA continues to urge governments to have plans in place so that no time is lost in restarting the sector when the epidemiological situation allows for a re-opening of borders.

“Most governments have not yet provided clear indications of the benchmarks that they will use to safely give people back their travel freedom. In the meantime, a significant portion of the $3.5 trillion in GDP and 88 million jobs supported by aviation are at risk. Effectively restarting aviation will energize the travel and tourism sectors and the wider economy. With the virus becoming endemic, learning to safely live, work and travel with it is critical. That means governments must turn their focus to risk management to protect livelihoods as well as lives,” Walsh said.

Employment Support

Industry losses of this scale imply a cash burn of $81 billion in 2021 on top of $149 billion in 2020. Government financial relief measures and capital markets have been filling this hole in airline balance sheets, preventing widespread bankruptcies. The industry will recover but more government relief measures, particularly in the form of employment support programmes, will be needed this year.

“Owing to government relief measures, cost-cutting, and success in accessing capital markets, some airlines appear able to ride out the storm. Others are less well-cushioned and may need to raise more cash from banks or capital markets.

“This will add to the industry’s debt burden, which has ballooned by $220 billion to $651 billion. There is a definite role for governments in providing relief measures that ensure critical employees and skills are retained to successfully restart and rebuild the industry,” Walsh said.

Cost containment/reduction

The whole industry will come out of the crisis financially weakened. Cost containment and reductions, wherever possible, will be key to restoring financial health.

“Containing and reducing costs will be top of mind for airlines. Governments and partners must have the same mentality. And that must be reflected in items big and small. There can be no tolerance for monopoly infrastructure suppliers gouging their customers to recoup losses through higher charges.

“Equally, we demand an end to the extortionate costs for COVID-19 testing with governments taking their cut on top of that with taxes. Everyone must be aligned in understanding that increased travel costs will mean a slower economic recovery. Cost reduction efforts on all sides are needed,” Walsh said.

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