Europe’s second lockdown will hit airline bookings in the Gulf but business is expected to return in time for the busy holiday period as European expats living in the Middle East flock home to see friends and relatives at Christmas.
England this week became the latest country in Europe to be plunged into a second lockdown, joining Belgium, France, Germany and Greece, all major markets for GCC airlines, in introducing renewed restrictions preventing people from travelling.
“Things may get a little bit more difficult [for Gulf carriers]”, said Adel Ali, CEO of UAE airline Air Arabia, which lists Bordeaux, Frankfurt and Brussels among its destinations.
“Our link to Europe and the UK is huge. Their lockdown will have a small impact I’m sure. A lot of tourism comes from Europe to the UAE, particularly Dubai; that will probably slow down now. And this is a peak time of year for that travel from Europe. That will have a slight impact.”
Industry analyst Linus Benjamin Bauer, managing director of Bauer Aviation Advisory, said that a sharp increase in cases in many countries in Europe “has the aviation industry on the defensive again”.
“It is clear that travel and transport will remain subdued through the last two months of 2020,” said Mr Bauer. “Those lockdown measures would hit bookings of the Gulf carriers, as well.”
“During the lockdowns in various markets in Europe with lower demand and bookings in the upcoming months, the Gulf carriers should also shift the focus more towards cargo operations,” said Mr Bauer.
Christmas opportunities
However a European lockdown now could present opportunities to Gulf carriers at the end of the year. Stricter rules could allow countries in Europe to open up travel at Christmas time, facilitating the annual migration of expats from the Gulf countries back north.
“Europe is locking down to bring [virus cases] under control,” said Mr Ali. “I suspect the locking down is to make sure people will have the ability to go home for Christmas. Maybe it will take a few weeks to get it back under control but we will go back to normality.”
Mr Bauer said that by offering foreigners one-year remote working visas, Dubai as a ‘Covid-19 safe’ destination “could become a so-called corona-exile for Europeans during the winter months”.
“These measures could give Dubai and Emirates a little boost in the point-to-point sector,” he said. “But the consumer and air travel confidence during these times will play a key critical role.”
Strategy shift
Gulf carriers will need to continue adjusting their European networks over the winter to protect cash. This might include reducing frequencies, cutting services to secondary airports in Germany and the UK and adjusting capacity through aircraft swaps.
“In a changed world where leisure demand dominates and business travel remains near-dormant, the Gulf carriers should also shift their focus on shaping the network/schedule for the next summer period,” said Mr Bauer.
He also said that Gulf airlines’ winter strategies should consider the distribution of Covid-19 vaccines.
“The Christmas season is coming and when Covid-19 vaccines have passed the essential testing procedures, so will they. The development of a vaccine is only half the problem. The bigger challenge will be the distribution of 16 billion vaccine doses on an unimaginable scale.
“Thus, in collaboration with other stakeholders, the Gulf carriers need to obtain the ‘first mover’ advantages during that time – supported by factors including the excellent geographical location of airports in the Gulf.”
UK-UAE travel corridor
UK routes are some of the most lucrative for UAE carriers and bookings will be impacted during England’s month-long lockdown.
A petition calling on the UK Government to place the UAE on the country’s travel corridor list has collected almost 20,000 signatures so far.
Currently, anyone arriving into the UK from the UAE must isolate for a period of 14 days.
There are currently no countries from the Middle East listed as part of the UK’s Travel Corridor, which includes Germany where infections rose by 21,535 in the 24 hours through to Saturday morning and followed a record increase of 23,553 from Thursday. While there were 129 additional deaths reported on Saturday morning.
In contrast, the UAE recorded 1,121 new cases of Covid-19 on Saturday and a further five deaths.
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