Biden administration plans to strengthen health measures around international travel
January 20 2021 06:26 PM
Alex Macheras
Alex Macheras

By Alex Macheras

It’s a new dawn in the US, as Joe Biden entered The White House as the 46th president. The US imposed travel restrictions on Europe last March and the Brazilian entry ban was put in place in May, but the White House decreed earlier this week (while Trump was still president) that the entry ban would end on January 26, six days after Mr Biden takes office.

Just minutes later, Mr Biden's spokeswoman, Jen Psaki, said on Twitter: "On the advice of our medical team, the administration does not intend to lift these restrictions on 1/26. In fact, we plan to strengthen public health measures around international travel in order to further mitigate the spread of Covid-19."

She said that with "more contagious variants emerging around the world, this is not the time to be lifting restrictions on international travel".

Pete Buttigieg will lead the US Transportation Department, making him the first of Biden’s Democratic rivals for the presidency to land a role in his Cabinet. The appointment of Buttigieg, 38, is another step in a meteoric political rise for the former mayor of South Bend, Indiana, who showed surprising strength as a presidential candidate. If confirmed by the US Senate, he would run a sprawling federal agency that oversees the nation’s airlines.

“I am nominating him for Secretary of Transportation because this position stands at the nexus of so many of the interlocking challenges and opportunities ahead of us,” Biden said in a statement.

“Jobs, infrastructure, equity, and climate all come together at the DOT, the site of some of our most ambitious plans to build back better.”

The new Secretary of Transportation has a tough job on his hands — not least because of the state of the aviation sector currently.

The damage to the airline industry from the coronavirus pandemic last year totalled $391bn in lower revenue as 60% fewer passengers took to the skies, according to a tally by the International Civil Aviation Organisation.

The financial hardship has continued into 2021 as airlines try to cope with a double-dip recession. Experts are maintaining their outlook for a prolonged depression in passenger demand that will likely keep airlines at a diminished size for several years.

ICAO estimated the airline sector’s first-half reduction in gross revenue will be between $163bn and $194bn. But there is optimism in many circles that business will start to improve as new Covid vaccines reach more people.

The price of insuring against a debt default by US airlines has fallen sharply as investors anticipate the industry will get a new round of bailout funding to help see it through to a coronavirus vaccine next year.

Even as the country’s main carriers burn through cash at a rate of tens of millions of dollars a day, and the pandemic continues to rage across the US, prices for airline credit default swaps have fallen to levels not seen since March or, in some cases, February.

The world's airlines need another $70-$80bn of government support to get through the crisis caused by the coronavirus pandemic.

That's according to the head of the International Air Transport Association (IATA), which is the trade association for the world's airlines.

June is when IATA expects the first significant easing of travel restrictions, as the impact of vaccines begins to be felt.

Government travel restrictions and a huge fall in passenger confidence meant global demand for flights fell about 60% last year, according to IATA figures.

That means 2020 saw about 1.8bn passengers fly, instead of the 4.5bn in 2019. In an industry where profit margins were already thin it means airlines are estimated to have already lost $118bn, with worse set to come.

The pandemic began to impact air travel exactly a year ago this week — in late January 2020 — when the outbreak was discovered in Wuhan, China. Initially, flight cancellations were limited to a few countries, but by the end of March the air transport system virtually came to a halt as airlines side-lined their fleets. At the time, the number of international passengers fell 98% below 2019 levels and domestic traffic was down 87%.

 

* The author is an aviation analyst.

 



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