The 30 day travel ban between the United States and Europe could cost US$2 billion. Midway between a ban running from mid-March to mid-April, revenue from about 5.5 million seats will be lost. It will be a devastating blow to an industry being brought to its knees by both the closure of borders and cessation of travel demand.
24,500 transatlantic flights will not run this month
Analysts at Cirium have crunched travel data to come up with this number. They say 24,500 transatlantic flights were timetabled to fly between 14 March and 12 April. As Cirium points out, while US$2 billion may not seem like a lot of money, this is just for the transatlantic market over a 30-day period. Cirium’s Director of Market Development, Alistair Rivers, said;
“While US$2bn may seem like a small figure in comparison to what the major US carriers generate alone for Atlantic flights, this represents a significant loss considering the ban only applies to Schengen countries and the UK over a 30-day period.
“As airlines around the world react to government restrictions placed on travel, their clear objectives for now are to help contain the spread of the virus–protecting people–and at the same time try to survive this unprecedented crisis.”
The situation is deteriorating on a daily basis
With the situation deteriorating daily, previously grim forecasts of financial headwinds are becoming worse. Just three weeks ago, IATA predicted a worst-case scenario of US$113 billion worldwide for the airline industry. That has now more than doubled to US$252 billion.
And IATA expects Europe to endure the worst of this. With borders closed and routes suspended, including the all-important transatlantic market, Europe’s airlines face a financial abyss. As the inevitable global recession kicks into gear, forward passenger demand will remain subdued even when borders re-open. IATA expects a 46% drop in revenue-per-passenger-kilometer this year.
No winners, lots of losers
According to Cirium, the two airlines that held the biggest slices of the transatlantic pie were Delta Air Lines and United Airlines. Delta had over 830,000 passenger seats available over the 30-day travel ban period. United Airlines had over 770,000 passengers seats timetabled onto the transatlantic routes.
British Airways was the biggest European carrier on the transatlantic routes. It is losing over 750,000 seats. Rounding out the top five transatlantic airlines are American Airlines and Lufthansa. American Airlines had 690,000 timetables seats across the transatlantic over the 30-day travel ban period. German carrier, Lufthansa, had over 600,000 seats available.
Approaching the problem from an alternative perspective – airports – it is London Heathrow that is most impacted. The European hub is losing 820,000 transatlantic seats over the 30-day period. Paris Charles de Gaulle will bid farewell to the revenue from 370,000 passenger seats. Frankfurt will lose over 340,000 seats, Amsterdam will lose over 290,000 passenger seats and Dublin will lose over 160,000 passenger seats.
These numbers are set to deteriorate further as countries tighten lockdown requirements and show no sign of easing cross border restrictions. It is a diabolical situation that will see airlines going out of business. These Cirrum and IATA forecasts are just beginning to scratch the surface regarding the long-term financial impact on airlines.
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