Why is the Delta CEO doubtful over the London-New York travel corridor?

  • November 23, 2020 10:46 AM GMT
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1425 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

Why is the Delta CEO doubtful over the London-New York travel corridor?

Summary

  • Delta Air Lines CEO Ed Bastian has raised doubts over the corridor due to pandemic restrictions.
  • The airline industry is still operating with long-range limitations by the airport authorities

Delta Air Lines CEO Ed Bastian has expressed his doubts on the functioning of New York-London travel corridor due to various pandemic restrictions on travel. The airline industry is still operating with a number of restrictions imposed by the regulators in the wake of the pandemic. A social distancing regime within the aircrafts and at the airports is being followed by the airport authorities and the respective flight operators in order to minimise the risk of virus spread. 

Though airlines have been operating under various limitations, the obligatory post arrival quarantine rules established by countries have kept a number of fliers away from their pre-planned travel schedules. 

 

The New York-London corridor

Recently, Bastian said that the New York-London route is “complicated” and that a transatlantic route from New York to any other European capital would be relatively easier to operate than London. 

The New York-London corridor has been one of the most lucrative routes for the flight operators due to a large demand from frequent fliers following which the traffic remained high usually with the presence of various international air carriers. 

But the situation is a bit different at the moment as there is a mandatory quarantine of 14 days for all the passengers flying between New York and London. 

Bastian indicated towards the countries where quarantine obligation is for fewer days as compared to the mandatory 14-day stretch, according to a Financial Times report. 

International passengers travelling across the world are subject to a mandatory quarantine for a set number of days. The government and airport authorities of various nations have incorporated well-equipped quarantine centres for the passengers according to their respective handling capacities.

 

Air travel in Covid-19 times

The duration of quarantine depends on several factors including the agegroup, the source country from which the passenger is coming from, temperature checks and any visible Covid-19 symptoms. 

Some countries that are heavily dependent on earning a sizable portion of national revenue from travel and tourism have relaxed the quarantine requirements to a fewer number of days.

Airlines and the travel industry have been incorporating a slew of measures that can help the businesses to stay afloat in the times of pandemic. Almost all the major international airlines and other domestically operated air carriers were mandatorily required to halt their operations barring a few very essential flights for over three months between March and June. 

After the removal of several restrictions by the national governments and regional state authorities, the air carriers relaunched their services following a long list of mandated guidelines issued by the travel regulators and health ministries of various nations. 

 

Delta Air Lines Inc (NYSE: DAL)

Shares of Delta Air Lines have recovered a major portion of their losses suffered during the slump due to the Covid-19 pandemic. The stock of Delta Air Lines crashed nearly 67.50 per cent to a yearly closing low of $19.19 (15 May) per share from a share price level of $59.04 a piece as on 2 January. Notably, the Delta share price has advanced by as much as 93.49 per cent to $37.13 from the yearly closing low price. 

 

Delta Air Lines shares (YTD performance)

(Source: Thomson Reuters)

 


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