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A brutal ending is shaping up for what has already been a lost year for the European travel industry as Covid-19 gives a final kick to airlines, innkeepers and travelers.
A mutant strain of the coronavirus that spread rapidly in the UK prompted Prime Minister Boris Johnson to limit holiday visits at home and abroad on weekends. Italy, the Netherlands and Belgium were among the countries that closed their borders to the former state of the European Union, while others prepared to follow suit.
Airlines that glimpsed the typical holiday pressure are now canceling flights or sending empty planes away so that stranded Britons can return. British hoteliers and holiday home operators are vacant during one of the busiest times of the year. Train operators had to contend with chaos over the weekend in a rush to leave London, while travelers hoping to visit family or a sunny getaway spend time on the phone seeking a refund.
“In essence, no one expected the winter to be good,” said Citigroup analyst Mark Manduca of the aviation industry’s year-end swoon. “We knew it was going to be bad, it’s bad, it just turns out to be really bad.”
Setback for airlines
The UK was Europe’s main air travel market before Sunday’s close
Source: Eurocontrol, based on December 19 flights
Thousands of flights are likely to be canceled in the coming days.
Before the latest lockdowns, airlines expected to offer just under a million seats between the UK and Western Europe this week, said Anne Correa, vice president for aviation and airport services at consulting firm Morten Beyer & Agnew. While that is down more than two-thirds from a year ago,until Christmas would be one of the few bright spots for the industry this year.
Ryanair Holdings Plc and EasyJet Plc will see the greatest immediate impact, she said, as they sell 49% of the seats between the UK and Europe.
“These bans will disrupt travel plans for thousands of travelers and lose peak revenue for airlines,” said John Strickland of JLS Consulting.
With the Brunt
Who pays often depends on the fine print of plane and train tickets that few read until a crisis breaks out. On social media, customers are engaged in payback battles with airlines, train operators and ticket brokers.
Some airlines, such as EasyJet, were quick to say they will offer cash refunds to customers whose travel was disrupted IAG SA’s British Airways and long-haul specialist Virgin Atlantic Airways Ltd. said they will limit compensation to vouchers or waive change fees.
Irish discounter Ryanair said on Sunday that it will grant refunds when EU countries ban travel between December 20 and December 24, but not to other countries to which the airline is allowed to fly.
Stranded travelers
Aside from the damage to their wallets, potential travelers thought their plans had failed. Twitter user Franchesca_3 said she could not board a flight from Britain to Sweden, where she is moving to, on Sunday because it would stop in Amsterdam, where the Netherlands had banned arrivals in the UK. She said she hopes to get to her destination before Sweden follows with its own ban.
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Those trying to leave the UK run the risk of being stranded without a place to stay. South London’s Premier Inn Wimbledon Broadway said it was open, but anyone booking a room must prove that they are there for a legitimate reason, such as on business, by showing a letter or email.
Small vacation rental operators were also out of pocket. Airbnb told customers they should get a refund if travel is limited, below a policy that was put in place before the final rules were adopted.
Cottages.com, the largest provider of self-catering accommodation in the UK, told owners it was contacting all guests living in a Tier 4 area – including London and much of South East England – to cancel reservations and offer a later booking or refund.
Scotland will move to Tier 4, the most stringent UK lockdown category from December 26 to at least mid-January, while Wales will have to close all holiday accommodation, Cottages.com said.
Trains and taxis
Train stations serving express routes from London were packed Saturday night amid an exodus ahead of the new rules. Some travelers rented cars or booked taxis for journeys of hundreds of miles to escape the capital and spend the holidays with loved ones.
Eurostar International Ltd. said it will reimburse passengers who are unable to travel through the Channel Tunnel on its trains, although the impact will be limited by demand already running at less than 30% of the usual Christmas level of previous curbs.
Manduca, Citigroup’s analyst, said the end-of-year chaos would likely have a knock-on effect, causing some travelers to delay their summer travel bookings early in the year.
While he expects negative sentiment on airline stocks in the near term, he said low-cost carriers like Ryanair can take advantage of pricing power when travel slows down. Airlines have become more agile with costs and can more easily adapt to shorter booking turnarounds, he said.
“I don’t think it will have a major impact on the fundamentals,” he said. “Summer can be pretty good.”
– With the assistance of Priscila Azevedo Rocha