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Caribbean resorts get starring role in U.S airlines' COVID-19 holiday playbook

CoronavirusNov 24, 2020 07:25AM ET
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© Reuters. FILE PHOTO: Tourists bathe on a beach in Cancun

By Tracy Rucinski

CHICAGO (Reuters) - U.S. airlines are adding flights, and in some cases COVID-19 testing programs, for travel to Mexico and the Caribbean, a region central to carriers' strategies to tap into pockets of holiday demand before a vaccine makes its way around the world. Beachside resort destinations in areas like Cancun are the only spots that now have more flights from U.S. cities scheduled for November and December than last year, numbers from aviation data firm Cirium show. Overall, U.S. airlines are flying about 50% less than 2019, with flights to traditional European vacation hotspots like Paris down by as much as 82% due to travel bans and quarantines. While new revenue streams from destinations like the Caribbean will help, they won't be enough to put airlines in the black for the year, analysts have said. The holiday period is traditionally when airlines thrive ahead of slow months in January and February. But this year they have said they will continue to burn millions of dollars daily through the fourth quarter as they wrestle with slashed demand.

Ahead of Thanksgiving, U.S. airports saw their busiest weekend since mid-March, even after the Centers for Disease Control and Prevention (CDC) urged Americans not to travel amid a spike in COVID-19 cases. Still, demand is down by around 60% and airlines say it's too soon to know how Christmas travel will play out. Still, airlines are hoping to build up a base of customers who feel comfortable about flying before a COVID-19 vaccine becomes widely available, eyeing the typically lucrative summer travel season.

More studies, including from the Harvard School of Public Health and the U.S. Department of Defense, have said the risk of COVID-19 transmission in flight is low if people wear masks. Recent positive vaccine developments have helped reassure investors that U.S. airlines can make it through the crisis. Sector shares rose 4% on Monday and are up 23% for the month.

But the speed and depth of their recovery, particularly from higher-margin business and international travel, will determine how they cut piles of debt they took on to weather the crisis. Airlines are trying to reboot overseas travel through bilateral bubbles - deals between countries on COVID-19 testing protocols that would replace or reduce quarantines - though programs have been slow to take off. United Airlines last week launched a free rapid COVID-19 testing program between Newark Liberty International and London Heathrow airports, and on Monday said it was rolling out a test program for flights from U.S. energy capital Houston, Texas to 10 places in Latin America and the Caribbean. Starting Dec. 7, passengers can take the self-collected, mail-in test 72 hours before departure for $119 to meet entry requirements at their destination.

Caribbean resorts get starring role in U.S airlines' COVID-19 holiday playbook
 

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