US ban on European visitors escalates travel industry pain

Business
NAT Trump

President Donald Trump speaks in an address to the nation from the Oval Office at the White House about the coronavirus Wednesday, March, 11, 2020, in Washington. (Doug Mills/The New York Times via AP, Pool)

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President Donald Trump’s 30-day ban on most Europeans entering the United States is the latest calamity for a global travel industry already reeling from falling bookings and canceled reservations as people try to avoid contracting and spreading the coronavirus.

The ban, announced Wednesday and set to begin at midnight Friday, won’t apply to Americans trying to return home — though they will be subject to “enhanced” health screening — or to citizens of the United Kingdom.

But coming on top of similar restrictions imposed by many other governments, Trump’s move is bound to drastically escalate the upheaval facing global airlines and travelers on some of the most heavily traveled routes.

The disruptions to air travel are rippling through economies in a blow to hotels, car rental companies, museums and restaurants.

Lucrative business travel was already down sharply because conferences have been canceled and companies have instructed employees to skip all but essential trips. And travel from and within Asia has been restricted for weeks as authorities try to stop the spread of the virus there.

Airlines scrambled Thursday to adjust to the new restrictions, with many telling customers they were still assessing options and asking for patience from those trying to contact them.

French retirees Jean-Michel and Christiane Deaux were among those weighing their options. They had spent months planning a 3,500-kilometer (2,200-mile) road trip across America and planned to fly to New Orleans later this month. Now they’re trying to reschedule for later in the year.

“When I heard this morning, I was very disappointed but not surprised,” Jean-Michel Deaux said. “All the preparations, ruined.”

There are usually about 400 flights a day from Europe to the United States, according to flight tracker FlightAware. Airlines have already been slashing their flight schedules, especially on international routes, to cope with a sharp decline in travel demand among fearful customers.

About 72.4 million passengers flew from the U.S. to Europe in the year ended last June, making it the most popular international destination, according to Transportation Department figures. About one-third of those passengers fly on U.S. airlines, the rest on foreign carriers. Trump didn’t mention restrictions on Americans traveling to Europe.

Even before Trump’s announcement, the International Airline Travelers Association was forecasting a 24% fall in Europe’s passenger traffic this year and $37 billion in lost potential ticket sales. Italy, which is all but closed off as authorities try to control the spread of the virus there, has been particularly hard hit.

In his address from the Oval Office, Trump said U.S. restrictions on people coming from China and other countries with early outbreaks of COVID-19 had held down the number of cases in the United States compared with Europe. He blamed the European Union for failing to immediately stop travel from China “and other hot spots,” which he said had led to clusters of outbreaks in the U.S being “seeded by travelers from Europe.”

Trump has called the disease a “foreign virus” and claimed that U.S. clusters were “seeded” by European travelers. He announced that all European travel would be cut off, but U.S. officials later said that restrictions would apply only to most foreign citizens who have been in Europe’s passport-free travel zone at any point for 14 days prior to their arrival to the United States.

“The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” European Council President Charles Michel and European Commission President Ursula von der Leyen said in a joint statement.

The new U.S. restrictions apply to most foreign nationals who have been in the 26-nation Schengen area of Europe in the 14 days before their scheduled arrival in the United States. The Schengen countries, which do not restrict travel among each other, include Germany, France, Italy and Spain.

The World Health Organization on Wednesday labeled COVID-19 a pandemic, citing its alarming spread and severity. Some experts have raised doubts over the effectiveness of tight border controls now that it has spread to so many countries.

In Asia, where the virus was first reported, governments have been imposing various restrictions on arrivals, requirements for health certificates and other precautions for more than a month.

An industry trade group warned that airlines worldwide could lose up to $113 billion in revenue from the virus — several times the damage caused by the 2001 terror attacks in the U.S. Since mid-February, shares of American Airlines have dropped by nearly half, United Airlines by more than one-third, and Delta Air Lines more than one-fourth.

It isn’t just U.S. airlines feeling the pain. Germany’s Lufthansa plans to cut up to half its flights because of a “drastic” drop in bookings. Cathay Pacific Airways warned Wednesday that it faces a “substantial loss” in the first half of this year. The Hong Kong-based airline canceled 90% of its flight capacity to the mainland at the start of February after Beijing told the public to avoid travel as part of efforts to contain the outbreak centered on the city of Wuhan.

Airlines, hotels and other travel businesses in East Asia already suffered a painful blow in January when demand plunged after China canceled group tours, told businesspeople to avoid foreign trips and imposed restrictions on foreign visitors.

China is the No. 1 source of foreign tourists for Japan, South Korea and Southeast Asian countries and a growing source of business travel. Airlines canceled thousands of flights. Hotels and other businesses closed.

With air travel and airline revenue plummeting, airlines are losing their appetite for new planes. On Wednesday, Boeing’s stock fell 18% — its biggest one-day percentage drop since 1974 — and the iconic airplane manufacturer announced a hiring freeze.

In China, more than three-fourths of virus patients have recovered and most suffered only mild or moderate symptoms, such as fever and cough. The illness can be severe and lead to pneumonia, especially in older adults and people with existing health problems.

More than 126,000 people in more than 110 countries have been infected. But the World Health Organization has emphasized the vast majority are in just four countries: China and South Korea, where new cases are declining, and Iran and Italy, where they are not.

Trump’s Homeland Security secretary acknowledged that the ban will further upend the airline industry.

“While these new travel restrictions will be disruptive to some travelers, this decisive action is needed to protect the American public from further exposure to the potentially deadly coronavirus,” DHS Secretary Chad Wolf said in a statement issued shortly after the president’s address.

Nicholas Calio, president of Airlines for America, a trade group for many large U.S. carriers, said the ban “will hit U.S. airlines, their employees, travelers and the shipping public extremely hard. However, we respect the need to take this unprecedented action.”

Henry Harteveldt, a travel industry analyst in San Francisco, said the ban will push airlines including American, Delta and United to reduce flights between the U.S. and Europe, and will cast a long shadow over the peak summer travel season.

“This is going to cause a lot of people on both sides of the Atlantic to reconsider where they are going to spend their summer vacation,” he said. “Leisure travelers will stay close to home,” while people traveling on business will be grounded by corporate restrictions, he said.

In January, the U.S. issued a similar ban on people coming into the country from China. That policy was later extended to people who had been in Iran.

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Associated Press writers Joe McDonald in Beijing and John Leicester in Paris contributed to this report.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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