Effect of Variant Omicron in Aerospace Sector

The spread of the new Omicron variant is worrying the aviation industry, which warns that travel restrictions are not a long-term solution to control COVID-19 variants. 

Earlier in the year, the aviation industry had optimistic recovery forecasts for 2021 but global airline revenue is projected to end up about the same as 2020, according to Bain & Company. Air travel demand is not expected to return to pre-crisis levels until 2023 and all projected global revenue forecasts continue to drop. Recent forecasts estimate that global revenues will fall to US$230 billion, just 34 percent of the industry's total revenue in 2019. Last year's global airline revenue totaled 33 percent of 2019's revenue. 

To date, the  Omicron variant is not having a strong impact on scheduled flights, according to a recent OAG report: "There will be bumps on the road ahead and the industry will recover. Airlines are ready for those bumps and from experience, travelers are flexible enough to work their way around travel restrictions." In Latin America, capacity has been recovering steadily. With some 2.2 million seats per week, Central America is now the regional market closest to its pre-pandemic capacity levels, being at -7 percent. Upper South America saw a capacity increase by 5 percent week on week and is now at -11 percent.

Under these circumstances, the International Air Transport Association (IATA) calls for caution. "Governments are responding to the risks of the new COVID-19 variant in emergency mode causing fear among the traveling public. As quickly as possible, we must use the last two years' experience to move to a coordinated data-driven approach that finds safe alternatives to border closures and quarantine. Travel restrictions are not a long-term solution to control COVID variants,” said Willie Walsh, Director General, IATA.

The association also criticized the European Commission Recommendation that the EU Digital COVID-19 Certificate (DCC) should only remain valid for up to nine months after the second vaccination dose, unless a booster jab is administered. "The EU DCC is a great success in driving a common continent-wide approach to managing the COVID-19 health crisis and in facilitating the freedom of people to travel again. It underpins a fragile recovery in the travel and tourism sector. And it is critical that any changes to it have a joined-up approach that recognizes the impact of divergent policies by individual member states and promotes further harmonization across Europe," said Rafael Schvartzman, Regional Vice President for the EU, IATA. 

Mexican President Andrés Manuel López Obrador said that there is still no evidence that the new variant will be more dangerous, so Mexico will not put in place lockdowns or close its borders.