Is Europe's 'Golden Age of Travel' Over?


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Britain will require anyone entering the country to self-quarantine for two weeks and other European countries are pondering similar measures, but the prospects of prolonged and even new travel restrictions are destroying what hopes the continent's airlines and tourist industry have been harboring of at least a partial coronavirus rebound.

Airlines are warning that more of them will join Virgin Atlantic in staring bankruptcy in the face. The coronavirus has already claimed Britain's biggest domestic airline, Flybe, which after being rescued from near collapse in January, finally declared bankruptcy in March as the COVID-19 outbreak started to unfold.

The British government confirmed Monday plans to force anyone arriving from overseas at airports or seaports, including returning vacationers and visiting business people, to self-isolate for 14 days. From June, travelers will be asked to provide an address where they are to remain for their self-isolation and they risk fines of up to $1,240 if they break the rules. Police will mount random spot checks, say officials.

Travel industry devastated

In a statement, Airlines UK, the association representing British-registered air carriers, said: "This proposal will effectively kill international travel to and from the UK and cause immeasurable damage to the aviation industry and wider UK economy. Nobody is going to go on holiday if they're not able to resume normal life for 14 days, and business travel will be severely restricted. It will also make it all but impossible for aviation to resume any time soon, thereby setting back the UK's economic recovery still further."

Entrepreneur Richard Branson's iconic Virgin Atlantic is searching for a bailout from the government and outside investors because of the coronavirus pandemic. He has said his luxury Caribbean island resort Necker Island could be used as collateral to help secure state aid for his ailing carrier. Virgin Group currently owns 51% of Virgin Atlantic, while the U.S.-based Delta Air Lines owns the rest. Virgin's Australian branch has already entered into the administration process and Virgin Atlantic has announced it is cutting a third of its workforce in the UK.

"We have weathered many storms since our first flight 36 years ago but none has been as devastating as COVID-19 and the associated loss of life and livelihood for so many," Virgin Atlantic's chief executive Shai Weiss said in a statement. British Airways has also announced layoffs and is planning to reduce its 10,000-strong workforce by more than a quarter.

Germany's Lufthansa, Europe's leading global airline group, is looking for a state bail out from Berlin to avoid bankruptcy. Air France-KLM was given last month French state-backed loans amounting to $7.6 billion to keep it afloat.

The consensus among industry observers is that it will take years for the aviation sector in Britain and elsewhere in Europe to bounce back to where it was before the pandemic struck. In the meantime, European airlines are hoping they can salvage some short-haul air travel over the next few months. Air France-KLM hopes to fly 20% of its capacity from July to September; Lufthansa plans to operate 160 passenger aircraft from June, using about 21% of its passenger fleet.

But much depends on when and how travel restrictions and bans will be lifted - and plans like Britain's have sent a further shiver down the spines of airline executives. The fear is that other European countries may follow suit, creating a patchwork of constantly changing restrictions.

The Spanish government Monday said it wants a joint European response to the air travel crisis. The country's economy minister, Nadia Calvino, told Bloomberg TV, "We are strongly supporting that there is a European response." One of her concerns is that individual European Union countries will offer different levels of state aid to their ailing airlines, distorting competition and giving some airlines, which receive more state assistance than others, an edge.

"All these large carriers are not one nationality or another, they are European carriers," she said. EU member states should ensure a "level playing field" for airlines, and governments with the deepest pockets should not be able to give more aid than others, she added.

Europe far apart

But whether EU national governments will be ready for a joint response is unclear. The pandemic has already exposed deep fissures in the EU and several incidences of national governments putting what they see as their own political and commercial interests first. That is already clearly on display with travel.

In a test of the Schengen arrangement of freedom of movement, national governments ignored Brussels at the start of the pandemic to impose their own individual border restrictions, and some Schengen countries are grouping together to plan their own regional approaches about travel restrictions moving forward.

The Baltic states have announced they will restore inter-Baltic freedom of movement from 18 May. Austria has discussed opening borders with Germany and the Czech Republic.

Brussels frowns on these "uncoordinated" approaches. The EU's Home Affairs Commissioner Ylva Johansson has urged all member states to start gradually lifting national border controls together, not piecemeal "We now need to get back to the future, back to normality," Johansson told EU lawmakers last week. She rejects selective border openings. "Member states cannot open the borders to citizens of one EU country, but not to another," she added.

But national governments say their first duty is to their own countries and they are continuing to explore bilateral or regional openings.

Border disputes are not helping the tourism industry and airlines to plan for the near future. According to the President of the French Union of Hotel Trades and Industries, Laurent Duc, Europe's tourism industry will be in turmoil for the next 18 months at least.

The end of cheap travel?

Aside from the struggling airlines, that kind of timetable will likely spell doom for many tour operators and hotels, say industry insiders. Some predict that without massive financial support from governments, many travel firms will go under, adding to joblessness.

In Britain, Karen Dee, chief executive of the Airport Operators Association, said, "If quarantine is a necessary tool for fighting COVID-19, then the Government should act decisively to protect the hundreds of thousands of airport-related and travel-related jobs across the UK."

Europe's tour operators are already struggling to reimburse customers for canceled vacations, which they are required to do under EU law within 14 days of a holiday being canceled by the organizer. Complaints are growing across Europe from aggrieved consumers that many airlines and operators are dragging their feet with the reimbursements.

Some fear the continent's tourist industry will never be the same thanks to the pandemic and that low-cost airlines, which democratized overseas travel from the 1990s on, will be wiped out. That could have the midterm effect of turning foreign trips and city breaks into the something only the wealthy can afford. "The democratization of travel has been a great achievement. We cannot allow this coronavirus to kill it," counsels Britain's Sunday Times newspaper.

The global tourism industry is forecast to lose between 850 million and 1.1 billion tourists this year. More than a hundred million jobs are at risk, say industry analysts.