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Double whammy: United says coronavirus surges and new quarantine rules are denting travel demand – again

  • July 07, 2020

WhenNew York, New Jersey and Connecticut announced a 14-day quarantine for arriving travelers in late June amid a coronavirus surge in several Sun Belt states, the big question for the airline industry was whether it would stunt a nascent travel rebound.

United Airlines answered the question with a resounding yes in a securities filing late Tuesday following an employee town hall.

Less than a week after touting its plans to add 25,000 more flights in August due to an uptick in travel demand, the airline said it would pare back those plans. Instead of operating 40% of the flights it did in August 2019, it will operate just 35%.

The reason: “reduced demand to destinations experiencing increases in COVID-19 cases and/or new quarantine requirements or other restrictions on travel.”

United said its Newark, New Jersey, hub has been hit particularly hard, with net bookings for domestic flights within the next 30 days down 84% on July 1 versus a year ago. Just a few weeks earlier, net bookings were off 65% from a year ago. Net bookings are the number of new bookings, minus cancellations.

The news comes as Chicago, United’s hometown and site of a major hub at O’Hare International Airport, this week joined the list of destinations requiring arriving passengers from 15 states to self-quarantine. And it comes as New York, New Jersey and Connecticut expanded their quarantine advisory to 19 states

Chicago enacts quarantine:  City will require visitors from 15 hot spots – like Florida and California – to self-isolate

United is again scaling back its flight schedule, citing reduced demand to destinations experiencing increases in COVID-19 cases and/or new quarantine requirements or other restrictions on travel.''

United said it plans to evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in travel demand. It said it expects its seat capacity to remain at August levels for the rest of 2020.

Overall, the airline said it expects travel demand to remain suppressed until “a widely accepted treatment and/or vaccine for COVID-19 is available.”

United is the first major airline to publicly detail the early damage from the spike in coronavirus cases and new travel restrictions. More details are expected when airlines begin reporting second-quarter financial results next week.

Spirit Airlines CEO Ted Christie said in late June that the the New York tri-state area’s quarantine, which includes travelers arriving from its critical Florida airports, was “not great news.”

But he said at the time that it was too early to tell whether the spike in cases and new travel restrictions would hurt bookings at a time when Spirit was adding summer flights due to increased travel demand.

Read this before you hit the road: These states still require travelers to self-quarantine or present negative COVID-19 test

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