Global airlines are bracing for more volatility due to the Omicron variant of SARS-CoV-2 that could force them to juggle schedules and destinations at short notice and to rely more on domestic markets where possible, analysts said.
Fitch Ratings said it had lowered its global passenger traffic forecasts for this year and next year, with the emergence of new variants like Omicron highlighting the likelihood that conditions would remain volatile for airlines.
“It feels a little bit like we are back to where we were a year ago and that’s not a great prospect for the industry and beyond,” Deidre Fulton, a partner at consultancy MIDAS Aviation, said at an industry Webinar yesterday.
Omicron’s impact would vary by country and region due to each government’s response and the diverse nature of global airlines, as well as their business models.
Japan Airlines Co and ANA Holdings Inc yesterday suspended new reservations for international flights arriving into Japan until the end of this month, as the country tightens border controls.
Hong Kong’s Cathay Pacific Airways Ltd (國泰航空), which lacks a domestic market and is operating at only 10 percent of pre-pandemic capacity, said it was too early to assess Omicron’s impact on demand.
Airlines in countries with large, strong domestic markets, such as the US, China and Russia, are better shielded from the greater uncertainties of international travel.
An analysis by UBS shows US carriers have not yet changed their scheduled capacity, which is running at 87 percent of 2019 levels this month and is expected to reach 92 percent of pre-COVID-19 capacity next month.
Travel booking Web site Kayak said international travel searches from the US were down only 5 percent on Sunday — a stark contrast to a 26 percent fall in searches from Britain, which had tightened testing requirements for arrivals.
Major European airlines are far more dependent on international travel than their US counterparts, placing them more at risk of fallout from the Omicron variant.
Airlines globally have been more agile about quickly adjusting their schedules and destinations during the pandemic and that is expected to continue, said John Grant, chief analyst at travel data firm OAG.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
Nvidia Corp CEO Jensen Huang (黃仁勳) on Thursday met with US President Donald Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker, people familiar with the matter said. Details of what the two men discussed were not immediately available, and the people familiar with the meeting declined to elaborate on the agenda. Spokespeople for the White House had no immediate comment. Nvidia declined to comment. Nvidia’s CEO has been vocal about the need for US companies to access the world’s largest semiconductor market and is a frequent visitor to China.
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