New COVID restrictions could slow air travel
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Leisure air travel is booming, but with COVID-19 cases soaring in the U.S., the airline industry can expect a slowdown after Labor Day — and that might actually be a good thing.
Why it matters: Airlines have struggled to keep up with the unexpectedly strong rebound in travel demand this summer, with Spirit Airlines' chaotic, cancellation-filled episode last week as the most extreme example.
- "The industry needs a little time to breathe," says Brian Kelly, CEO of The Points Guy, a travel advisory website. "In all my years, I've never seen an airline completely melt down like Spirit Airlines."
Driving the news: Southwest Airlines warned Wednesday that it may not be profitable in the third quarter due to the impact of the Delta variant.
- "The Company has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021, which are believed to be driven by the recent rise in COVID-19 cases associated with the Delta variant," Southwest said in an SEC filing.
Where it stands: About 2 million people per day are passing through TSA airport security checkpoints this summer, about 21% below 2019 levels, says Airlines for America.
- Domestic air travel is down about 13%, while international travel is down 39%. Business travel remains far below normal levels but had been expected to start picking up in the fall after children return to school.
Yes, but: Amid a new surge in coronavirus cases, the Centers for Disease Control and Prevention is rapidly adding countries to its "Do Not Travel" list because of their "very high risk" of infection.
- New travel warnings were issued this week for France, Iceland, Aruba, Israel and Thailand, among others.
- Other popular destinations in the "very high risk" category — 74 countries in all — include Greece, Ireland, the United Kingdom, Portugal, Spain, the Netherlands and Costa Rica.
- Those who must travel to those countries should be fully vaccinated, the CDC says, and anyone traveling overseas must have a negative COVID test to re-enter the U.S.
Meanwhile, the European Union has not yet shut the door on American visitors, but that could change in the coming weeks.
Be smart: There are no domestic travel restrictions in the U.S., but if the CDC applied its own standard to individual states, 39 would be flagged as a "Do Not Travel" destination, Forbes reports.
- If Florida were a country, it would rank second in the world for new infections, and Louisiana would rank fourth, per Forbes.
The bottom line, per Kelly: "I'm still comfortable traveling to Europe, where the numbers are way lower, and the [mask] culture is much more in line with common sense.
- "For people to cancel their trips to Europe and travel somewhere in the U.S. instead doesn't make much sense."
Editor's note: This story has been updated with Southwest's warning about profitability in the third quarter.
