Events and media company Access Intelligence early this week pressed ahead with its big Satellite 2020 exhibition in Washington DC, despite coronavirus panic and a decision by some corporations to send smaller teams to the show. The expo is typically populated by scores of men in dark suits, which seems especially appropriate given the impact that the coronavirus is having on people and businesses around the globe. The Satellite 2020 exhibition was ultimately cut short a day early by the organizers as COVID-19 was named a pandemic by the World Health Organization. Last week, the PaxEx industry’s largest exhibition, the Aircraft Interiors Expo in Hamburg, was postponed as cases escalated in Europe.
The full economic fallout of this pandemic is not yet known, but when airlines face financial pain of seismic proportions, it trickles down to all other industry stakeholders, and could have the unfortunate effect of stymying innovation. US airframer Boeing and mammoth avionics and PaxEx supplier Collins Aerospace last week assured that the downturn would not stop them from investing in new commercial aircraft technologies, reported Flightglobal. Much has happened since then.
In a bid to contain the coronavirus – which is spreading in the United States – President Donald Trump announced a 30-day restriction on travel between the US and the 26 countries in the Schengen Area of Europe: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.
Later clarifying Trump’s remarks, US Homeland Security acting secretary Chad Wolf said the restriction suspends the entry of “most foreign nationals” who have been in these countries at any point during the 14 days prior to their scheduled arrival to the US.
“It does not apply to legal permanent residents, (generally) immediate family members of US citizens, and other individuals who are identified in the proclamation,” said Wolf, noting that the move is similar to earlier travel restrictions on individuals who had been in China and Iran. The proclamation goes into effect at 11:59 p.m. eastern daylight time on 13 March. The UK and Ireland, which are not part of the Schengen Area, are exempt.
Trump’s action immediately created confusion, forcing Americans and foreigners alike to beg airlines for clarity when they themselves were still assessing what it would mean to their operations. “What about Europeans already in the US with booked flights back to Europe scheduled after Friday? Do we have to leave immediately?” asked one traveler of Lufthansa. Another stated: “I have a flight leaving today, and coming back to the USA in a week. How should I act on this? I can’t not be let back into the USA.” Lufthansa responded at the time by telling customers it had no further information, and urging them to check the flight information page regularly.
By midday on 12 March, the German operator had issued a formal message to travelers. It committed to continue offering flights to the USA from Germany, Austria, Switzerland and Belgium. It advised passengers planning a trip over the next few weeks “to check the status of the respective flight on lufthansa.com, swiss.com, austrian.com or brusselsairlines.com” before embarking on their journey.
Germany, France and The Netherlands are most exposed by Trump’s new Europe-US travel restrictions, as outlined by aviation journalist Will Horton in an article for Forbes. Using a baseline of April 2019 flights and passengers, Horton noted: “The UK, which is exempt from the ban, is the single largest European market from the US, accounting for 31% of flights – 137 a day carrying 31,000 passengers in April 2019. This is almost as big as the next three largest countries combined: Germany (13%), France (11%), and the Netherlands (9%) for a total of 33% or 143 flights a day carrying 35,000 passengers.” These stats will look very different in the days to come.
SAS in a statement said the new US government restrictions from 14 March and 30 days ahead “will have effect on SAS flights to/from the US.” Air France said it is “currently assessing the impact of the recent US Department of Homeland Security’s proclamation guidelines on our operations to the United States”.
Given the fact that the coronavirus knows no borders, the European Union has condemned Trump’s action. EU Council President Charles Michel and Commission President Ursula von der Leyen in a joint statement said:
The Coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action. The European Union disapproves of the fact that the US decision to impose a travel ban was taken unilaterally and without consultation. The European Union is taking strong action to limit the spread of the virus.
Meanwhile, US airline lobbying group, A4A is applauding Trump’s decision. A4A president and CEO Nicholas Calio said: “We commend President Trump for continuing to take decisive action to protect the health and well-being of the American people. For US airlines, the safety of our passengers, crew and cargo is – and always will be – our top priority. The unforeseen outbreak of the coronavirus has directly impacted the US airline industry, which is critical to the US and global economies. This action will hit US 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.”
US major Delta Air Lines, a member of A4A, has already waived change fees for customers traveling to, from or through Europe and the UK through 31 May.
The situation creates great uncertainty for US and non-US citizens alike. Even before Trump’s proclamation, your author was warned by a major European aerospace corporation that if I proceeded with my own planned travel to Europe at the end of this month I might encounter difficulty when trying to return to the United States. Was this a prescient statement?
While the US measure recognizes the need to continue to facilitate transatlantic trade, the economic fallout of this will be broad, warned the International Air Transport Association (IATA).
“Governments must impose the measures they consider necessary to contain the virus. And they must be fully prepared to provide support to buffer the economic dislocation that this will cause. In normal times, air transport is a catalyst for economic growth and development. Suspending travel on such a broad scale will create negative consequences across the economy. Governments must recognize this and be ready to support,” said IATA CEO Alexandre de Juniac.
Given the overall toll on industry of the coronavirus pandemic, the Airline Passenger Experience Association, which represents nearly every major airline in the world, is calling on governments worldwide “to issue immediate tax relief in an even-handed manner” for the airline industry in the wake of the coronavirus pandemic.
“Airlines are critical to our world’s economy and connecting the lives of billions,” said APEX CEO Dr. Joe Leader. “APEX’s recommendations for governments reducing taxation, penalties, and slot/gate bureaucracy in the midst of a crisis will go a long way toward ensuring economic recovery. Now more than ever, we need to enable airline resources and funds to go into both the health of our industry and our customers worldwide.”
The association has put forward three recommendations: reduce all possible global tax burdens on airlines during this stressful time; suspend “hidden taxes” such as forced slot and gate utilization, and remove any new aviation taxes/penalties from consideration.
To its credit, the FAA has already temporarily waived minimum slot-use requirements at congested US airports to help airlines that cancel flights due to the Coronavirus. Under normal circumstances, airlines can lose their slots at congested airports if they don’t use them at least 80% of the time.
The European Commission (EC) is granting the temporary suspension until 20 June 2020. “The decision reflects the unprecedented situation facing the airline industry. However, granting the suspension only until June is the very minimum the industry needs, and a decision on a full suspension until October will be needed within the next month to allow airlines to plan their schedules,” said IATA.
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