Corona Virus versus the Travel Industry

Howdy all. Yes, another week and another post about Corona Virus. I am, I promise, getting a bit over it all but there are still some things I wanted to discuss, and so today I really wanted to talk about the travel industry and just what this might mean for it, because I’m not sure there is an industry in the world that is going to struggle to recover more from the pandemic we are facing right more than the travel industry.

And on top of that, INTERNATIONAL travel is going to be slower to recover than domestic. I can see a stage, maybe in a couple of months here in Australia where thus far we have contained the virus pretty well, where things start to go back to normal. Most people will be back at their jobs – provided they still exist, and our government is providing a payment to employers here to keep their staff on even though there is no work (and this payment is meant to get passed on to the employee) and they are estimating this will keep the jobless rate at 11 per cent or less. Last figures didn’t show the effects of the virus on jobs here.

So once we’re back at work, then the states will have to open borders. Most if not all are shut at the moment as the states and territories here are for the most part in charge of enforcing the restrictions, although the Federal Government expects them to follow their guidelines. It may yet be that large gatherings are banned for some time yet. Principally sports events. Football seasons are on hold, but the National Rugby League is talking of a restart around the end of May, Australian Rules Footy a little later. They may both be playing games for the TV audience for a few months. But I can see domestic travel opening back up possibly before we have crowds at the footy.

Australia and New Zealand look likely to do a deal to see travel between the two countries resume too, and that might not be far behind. New Zealand have done probably better than any country in the world at containing the virus, going into strict lockdown very quickly. As a result they are now talking about starting to ease restrictions I think next week or the week after. As it stands in Victoria, May 11th is when the next decision on lockdown is likely to come through and it may also see the starting of easing of restrictions.

So perhaps that would mean that a few days away in Victoria may be possible. A bit later we might see domestic flights resumed, then between Australia and New Zealand. But full international travel I would say won’t be on the cards until much later in the year.

How has the travel industry been impacted?? Well domestically, most hotels are empty, except for a select few who are getting paid to house returnees from overseas for 14 days in isolation. How small BnBs are going, I cant imagine because it’s likely they are doing no business at all. To keep people from poverty, the Federal Government has doubled unemployment benefits and eased the levels at which they are allowed.

Travel agents and airlines are taking huge hit. Flight Centre, probably the biggest group of travel agents in Australia, announced just as the whole thing was starting that they were closing 100 stores worldwide, and that was something they were planning on doing anyway. Australia’s second biggest airline, Virgin Australia though, has been worst hit. It’s been grounded for weeks and has just started ferrying people domestically thanks to the government getting people in isolation back to their home states. Nevertheless, on Tuesday last week it went into voluntary administration. It was struggling beforehand, only making a profit twice in the last ten years.

Whether it survives or not is hard to read here. It employs thousands of people, and helps keep prices competitive. It’s part of the Virgin Group and a lot could depend on whether Richard Branson himself wants to save the company. One piece of news I noticed upon was that late last week (around the 24th) Perth Airport took three of Virgin’s planes I think in lieu of monies owed. We’ll see what happens to Virgin Australia but it’s not looking at all promising.

Flight Centre are capping their cancellation fees at $300, after outraged customers were having to forfeit much more, but I guess the truth is that in this situation no-one wins. And with it likely to be years and years until the travel industry is back on its feet, what will travel be like.

Some have said that when travel starts back up again that things could be really cheap. People will be reluctant to travel at first and so airlines and the like will be dropping prices right down low. Combine that with the price of oil which last week hit NEGATIVE $40USD a barrel (YES, you get oil and $40USD to take it away) I can see why people would say that, but on the other hand I think it could become far more expensive.

Airlines are unlikely to be stockpiling fuel right now as they don’t know how long it will be until they can use it. And restrictions on airlines are likely to be enforced – Qantas just changed their policy for example, they had been flying full planes back to Australia with Aussies trying to get home from places such as Peru and Cambodia – and in line with a lot of airlines, they will not be using the middle seat. Emirates have plans to test every passenger for Corona-Virus. Not going to be cheap, and flying at a maximum of 2/3 capacity possibly more like ½ means the passenger is going to have to pay.

Right now the world is full of grounded airplanes and companies on the point of bankruptcy or beyond. We won’t just be ‘flicking a switch’ and returning to normal. Travel is the last thing to get back up and running too. This is going to be a long wait for travel dreams to come true I’m afraid. But – we can learn to travel more domestically. Explore our own backyards more. Explore your state or province. Then reach out into other parts of your country. Then finally, overseas again!

My plan is to travel mid-2021, or perhaps later in the year. We will see. Thanks for reading! May the Journey Never End!

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