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* Concerns growing about bookings, business travel delays
* United Airlines CEO sees near-term impact on bookings
* Fitch Ratings lowers passenger forecasts for 2021, 2022
* Impact on airlines varies by country, business model
(Adds comments from United Airlines CEO, ICAO)
By Jamie Freed and Rajesh Kumar Singh
SYDNEY/CHICAGO Dec 1 (Reuters) - Global airlines are bracing
for more volatility due to the Omicron coronavirus variant that
could force them to juggle schedules and destinations at short
notice and rely more on domestic markets where possible,
analysts say.
Many travellers have already booked trips for the Christmas
period, a peak season for airlines, but since news of the
variant last week, there are growing industry concerns over a
pause in future bookings and further delays to the already slow
recovery in business travel.
On Wednesday, United Airlines Chief Executive
Officer Scott Kirby said the new variant will have a near-term
impact on bookings.
Fitch Ratings has lowered its global passenger traffic
forecasts for 2021 and 2022, saying the emergence of new
variants like Omicron highlight the likelihood that conditions
would remain volatile for airlines.
"It feels a little bit like we are back to where we were a
year ago and that's not a great prospect for the industry and
beyond," Deirdre Fulton, a partner at consultancy MIDAS
Aviation, said at an industry webinar.
The International Civil Aviation Organization (ICAO) called
for a "more measured and evidence-based" response, saying "the
costs of significantly restricted global air mobility affect all
countries".
Airlines have been blaming a lack of consistent and stable
health protocols as well as border restrictions for depressed
international travel demand.
New protocols in the wake of the Omicron variant are
expected to add to their headache.
The United States https://www.reuters.com/business/healthcare-pharmaceuticals/us-cdc-urges-americans-avoid-travel-niger-poland-over-covid-19-2021-11-30,
for example, is moving to require that all air travellers
entering the country show a negative COVID-19 test performed
within one day of departure.
All non-EU travellers to mainland France, where the Omicron
variant has not been detected yet, will have to show proof of a
negative COVID-19 test, regardless of their vaccination status,
a government spokesman said. Ireland and Portugal are also
demanding that travellers produce a negative test.
Airlines are currently using a range of apps to verify test
results. Delta Air Lines said it would comply with
Washington's directives, but did not say if the new testing
requirement would need the carrier to make any changes to its
verification app.
IMPACT TO VARY BY REGION
Omicron's impact will vary by country and region due to each
government's response and the diverse nature of global airlines,
as well as their business models.
Japan Airlines and ANA Holdings on
Wednesday suspended new reservations for international flights
arriving into Japan until the end of December as the country
tightens border controls.
Hong Kong's Cathay Pacific Airways, which lacks a
domestic market and is operating at only 10% of pre-pandemic
capacity, said it was too early to assess Omicron's impact on
demand.
Airlines in countries with large, strong domestic markets
like the United States, China and Russia are better shielded
from the greater uncertainties of international travel.
An analysis by UBS shows U.S. carriers have not yet changed
their scheduled capacity, which is running at 87% of 2019 levels
in December and is expected to reach 92% of pre-COVID capacity
in January.
United Airlines is launching its Newark-Cape Town route on
Wednesday and Delta Air is expecting strong bookings over the
Christmas period.
"In the past year, each new variant has brought a decline in
bookings, but then an increase once the surge dissipates. We
expect the same pattern to emerge," said Helane Becker, an
analyst at Cowen and Co.
Travel booking website Kayak said international travel
searches from the United States were down only 5% on Sunday - a
stark contrast to a 26% fall in searches from Britain, which had
tightened testing requirements for arrivals.
Major European airlines are far more dependent on
international travel than their U.S. counterparts, placing them
more at risk of fallout from the Omicron variant.
In Asia, countries like Australia, Japan, Singapore and
Thailand had only begun to cautiously lift border restrictions
in recent weeks and passenger numbers remained at fractions of
pre-pandemic levels before the Omicron variant was discovered.
John Grant, chief analyst at travel data firm OAG, said
moves by Japan and Australia to delay entry to some foreigners
due to Omicron were "sad and frustrating" but the proportionate
impact on travel was "relatively insignificant."
Airlines globally have been more agile about quickly
adjusting their schedules and destinations during the pandemic
and that is expected to continue, he said.
(Reporting by Jamie Freed in Sydney, Rajesh Kumar Singh in
Chicago, Sakura Murakami in Tokyo, Padraic Halpin in Dublin
Editing by Kim Coghill, Mark Potter and Marguerita Choy)
