ASM blog: Here comes the sun?

Discussing the importance of the summer season, one of our team described the upcoming months from May through September as probably the most important since the deregulation of the industry back in the Seventies. Perhaps too dramatic, but the sentiment about how much the season ahead really matters feels true.

I was then taken by the comments of Rikke Munk Christensen from Virgin Atlantic during our recent Aviation Week webinar, where we both shared the platform with Kevin Chan from Scoot. When discussing the challenges of rebuilding air services, she talked about this being the first time the industry would be completely restarted. It is an interesting truth, such a restart has never happened before and we are all ready, waiting and hoping to rebuild as fast as we can.

AW Webinar

Aviation Week Webinar - How will COVID-19 Reshape the Skies? – Feb. 23, 2021

The stakes are high, Summer 2021 matters hugely. For governments whose economies depend on tourism, for airlines, tour operators, hotels, ground operators and of course us as consumers. Now a year into lockdowns of various forms the pent-up demand to vacation again is as high as it ever will be.

At the recent CAPA Live event, Johan Lundgren said that easyJet had stopped surveying demand. Their search, enquiry and bookings response told them everything they need to know about the desire for summer sun destinations. When the UK Government recently announced its roadmap out of lockdown restrictions, Jet2 reportedly saw an increase in bookings of 1000%.

Internationally the four biggest tourism source markets—the US, China, UK, and Germany—will drive, or not as the case maybe, the industry recovery this summer. Underpinning their travel patterns will be the state of border openings, implementable regulations and of course the success of the vaccination programs which underpin the pre-requisite of traveling as safely as possible.

ASM Border Restrictions Tracker 2021

ASM Border Restrictions Tracker 2021

Our border restrictions data shows that over the past month there has been further tightening, with now only 3% of the world borders fully open. Over 19% of countries now require negative tests and quarantine on arrival, this being in effect a border closure. Sitting here in the UK we await a potential opening of international markets from May 17, we all hope the conditions are such both here and within the destinations we want to visit that the summer can truly commence at that point.

VaxData1

The vaccination programs tell a further story with the US and the UK looking the furthest ahead. Early data suggest that these programs are delivering success in all the ways we would want: reduced hospitalisation, reduced severe illness and reduced virus transmission.

The extent of vaccinations of the big source markets is the key driver for the opening of borders and markets starting up again, what is left then will be the habits/preferences of the consumers and the governmental agreements to enable flights again.

VaxData2

Tourism of the US consumer is predominantly domestic, and so we should look to the home market here to drive the aviation recovery. For China, which has been the largest driver of international tourism growth for many years, we again expect 2021 to be dominated by domestic tourism with the tight restrictions on international flights continuing.

In Germany, if the pace of vaccinations steps up and EU nations agree to open more fully by the end of June as has been reported then we would expect a late surge of international vacation demand.

That leaves the UK, with an expectation of all adults receiving at least the first vaccine dose by end July, and destinations such as Greece pushing hard to agree the conditions to allow their markets to be open from May via vaccine passports and negative tests. It looks like this will be the international market to watch.

We all want and need travel to be safe, no longer a cause for concern in the spreading of the virus. But we all need our governments to recognize the progressions we are experiencing and put in place, as Michael O’Leary expressed this week, a workable “summer solution.” This would allow tourism markets to open, and in-turn airlines, airports, and destinations to make the most of the season ahead.

If the Mediterranean markets do start to open from May 17 and the operating season goes well, we should truly be able to say that the Route to Recovery is underway.