As Americans slowly begin traveling this summer, there’s one ultra-popular region that remains inaccessible, even for those comfortable with air travel: the European Union.
On Wednesday, the 27 nations in the E.U. (plus Iceland, Norway, Switzerland, and Liechtenstein) reopened to citizens from select countries that have their outbreak of COVID-19 under control. Absent from the list was the U.S., where the virus is dramatically proliferating in several regions across the country. The E.U. will review the ban every two weeks, but for now, Americans are barred from visiting Europe—save for a few exceptions such as diplomats and healthcare workers. The ruling might have a huge impact on Americans’ vacation plans, but it will have even harsher consequences for the U.S. airlines with which they would have booked.
The situation for airlines is “unprecedented,” says Isobel Fenton, platform curator for aviation and aerospace at the World Economic Forum. “Never before has there been such comprehensive air-disconnectivity between the continents in terms of scale and duration.” Also worth noting is the fact that President Donald Trump’s ban on travelers from Europe’s Schengen Area, instituted in March, is still in effect as well.
In a year of extreme financial distress, losing out on the lucrative European summer travel season is yet another blow to airlines’ bottom lines. “U.S. carriers, and carriers globally alike, have been hemorrhaging cash for months now,” Fenton says. “So U.S. carriers will certainly suffer by not being able to meaningfully participate in the transatlantic market at the moment, but this is just one of the sources of financial challenge for the carriers.”
Even once restrictions roll back and travel demand picks up, it will likely be months before airlines can earn significant profits again. “As more travelers take to the skies, the revenue benefit of these additional passengers will not be truly additive to the airlines as many of these first travelers will be utilizing travel vouchers or flying on re-booked tickets from services disrupted during the crisis,” Fenton says.
As a result, some U.S. airlines are delaying the resumption of their European routes until as far as summer 2021—or cutting them altogether. American Airlines, for instance, announced on Wednesday that it’s delaying the relaunch of many of its flights to Europe until at least this winter and into next summer. According to the carrier’s newly released schedule, capacity for its long-haul international flights in summer 2021 will still be 25 percent lower than it was in 2019. It’s also canceling highly anticipated new route launches that were supposed to happen this year, including routes from Chicago to Budapest, Prague, and Krakow. And American is nixing flights between its Charlotte hub and Paris, Rome, and Barcelona, as well as a Chicago to Venice route, among others. Many of its remaining routes to Europe, like New York JFK to Barcelona and Milan, and Dallas to Rome, aren’t slated to restart until next summer.
Other U.S. carriers are cautiously working around the current restrictions and relaunching certain routes to Europe. United Airlines, for instance, announced on Wednesday it would be adding a handful of key transatlantic European flights in August amid a larger push to add thousands of routes back that month.
“We’re at the worst situation right now where all the borders are closed, and if you think about it globally, most every country’s border is closed,” Patrick Quayle, United’s vice president of international network and alliances, said on a media conference call on Wednesday. “But that has not stopped us from operating flights because there’s a lot of repatriation. What you’re seeing us add is really a very gradual build, and it’s based on the demand that exists in the market today.”
But the travel restrictions aren’t the only hurdle airlines will need to overcome to get these routes fully functional again. When the E.U.’s ban on American travelers is lifted, it could still be an uphill battle to get travelers to book European vacations en masse. “Current indications are that many travelers would be wary to venture overseas even once border restrictions are lifted for fear of the landscape or the rules changing,” Fenton says, noting that current 14-day quarantine mandates, especially, are a deterrent for both business and leisure travelers.
To mitigate this, flying to destinations with fewer restrictions is one of the only options airlines have in their playbook right now. “Given that U.S. airlines will be unable to operate their usual volume of transatlantic services, they will need to be opportunistic and redirect their networks towards routes that are currently open to them and where there is demand,” Fenton says.
Quayle says that idea is part of United’s international route strategy: focus first on its European alliance partner hubs, like Brussels, Frankfurt, and Munich, where passengers can make flight connections (still allowed for U.S. fliers) and build out from there. Meanwhile the airline is adding flights to countries where restrictions are already rolling back. “It’s about adding a lot of breadth and adding a lot of flying into Latin America, where borders are supposed to be opening, and then gradually and smartly adding flights across the Atlantic into our partner hubs,” he says.
It might seem like a risk, especially because operating only partially full planes on such routes could mean the airlines are operating at a significant loss, according to Fenton. But Quayle says United can make up the difference by carrying additional cargo and other commerce shipping services on the relaunched Europe routes. Due to the crisis, airlines are learning to be more nimble than ever with their schedules. “Gone are the days of months’ long route studies,” Fenton says. “Airlines are now turning to data to make these decisions in real time.”
Most airlines are still holding out for travelers to vacation in Europe when the situation improves. “Once the E.U. travel ban on Americans is lifted, you can be sure that U.S. carriers will be moving at warp speed to reinstate services,” Fenton says. “And, pent-up demand may serve to actually extend the traditional summer travel period, some are suggesting September may be the new July.”
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