The Legal Impacts of COVID-19 in the Travel, Tourism and Hospitality Industry

Since IATA’s revision, things have gotten worse: lucrative transatlantic routes, which earned airlines around 20 billion dollars in sales last year, have been hit by President Donald Trump’s 30-day ban on most flights to America from Europe, which took effect on 14 March; Delta, an American carrier, says it may have to trim international schedules by 40%, up from a 25% reduction before the ban; and Lufthansa, Europe’s biggest carrier, had already cut flights in half for April. As more countries impose travel restrictions, the German airline may need to thin schedules by 90%, reckon analysts at Bernstein, a research firm. Others that serve smallish domestic markets and rely on global interconnections may need to shut down altogether. Many airline CEOs cling to the hope that global passenger numbers will follow the same trajectory as in the wake of previous disruptions, such as the terrorist attacks of 9/11 or the global financial crisis of 2007-09 (see chart 2). After a few months of disarray, travel patterns then reverted to normal and growth resumed. That is, more or less, what has happened in China, this year, as Chinese carriers were struck first. At the peak of the outbreak, in mid-February, around 70% of flights were grounded, according to OAG, a travel data firm. Now that infections are stabilising in the country, Chinese passengers are getting back in the air, tempted by significant discounts, and the latest data suggest that capacity is now down by 43% compared with a year ago.