Travel News

Tourism association 'caught off guard' by U.S. increasing travel advisory for Canada - THE CANADIAN PRESS

AUGUST 31, 2021

Canada's national tourism association says it was caught off guard and disappointed when the U.S. increased its travel advisory for Canada.

The U.S. State Department urged Americans to "reconsider" travel to Canada as they set the travel advisory to Level 3, after just a three-week period where Canada was at Level 2 with the land border open to U.S citizens and permanent residents.

The Travel Industry Association of Canada says the decision will further hurt the country's battered tourism businesses, especially ahead of the first long weekend with Americans being able to travel through the land border.

However, Flight Centre says it believes the advisory will not have a substantial impact on Americans travelling to Canada, since there are no additional restrictions in place.

Spokeswoman Allison Wallace said there is enough pent-up demand that Americans with travel plans will go ahead with their trips.

Vaccinated Americans have been allowed to cross into Canada via the land border without quarantining as of Aug. 9, although Canadians are still not able to cross the land border into the U.S.

This report by The Canadian Press was first published Aug. 31, 2021.

The Canadian Press

Nigeria's Cally Air at risk of grounding - report - CH-AVIATION

AUGUST 31, 2021

Virtual startup Cally Air (Calabar) is at risk of being grounded barely a month after it started operating with its shareholder, the Cross River State government, saying it has been unable to withdraw the cash needed to pay for the insurance and maintenance of its aircraft, local media report.

The airline, operated by Aero Contractors (N2, Lagos) on behalf of the Cross River state, only began operations on July 15 on routes between LagosKano, and Abuja with two B737-300s.

However, State Commissioner for Aviation Jake Otu-Enyia has told local reporters his administration has been unable to draw funds deposited in an unnamed commercial bank in order to pay for the insurance and maintenance of the aircraft. “Cally Air is at the risk of being shut down because we are unable to get money from the bank to renew our insurance and do maintenance of our aircraft as its standard practice and instructions from the NCAA (Nigerian Civil Aviation Authority),” he said.

Neither operator, Aero Contractors, nor the NCAA, were immediately available for comment.

Otu-Enyia was speaking to local newspapers while he and his staff were staging a protest at the entrance to the bank in Calabar. He claimed the bank was deliberately frustrating the state’s efforts to withdraw its funds. “We have been here since last week trying to withdraw our money from this bank. They keep telling us 'come tomorrow' and all that. We took this action because we need the money for the servicing of our aircraft and to complete the renewal of our insurance, otherwise, our aircraft will be grounded. The ministry is not asking for a loan; we came to withdraw our money and nobody is telling us why we cannot withdraw our money,” Otu-Enyia said.

Europe Wants Unvaccinated Americans to Stay Home. It’s Bad News for Airline Stocks. - BARRONS

AUGUST 31, 2021

Americans who managed a holiday in Europe this summer may have sneaked in under the wire.

New travel restrictions may be coming for unvaccinated Americans as Covid-19 cases surge in the U.S. The European Union on Monday removed the U.S. from its list of countries for which nonessential travel restrictions should be lifted. Israel, Kosovo, Lebanon, Montenegro, and North Macedonia were also removed.

The EU allows its 27 member countries to impose their own restrictions, and entry requirements vary widely. It’s expected that fully vaccinated Americans will still be able to travel to Europe without quarantine requirements.

But this may signal a new wave of clampdowns on travel as Covid cases surge in the U.S. while vaccination rates in the country trail European countries, Canada, and other regions.

It’s a blow for airline investors who were banking on a recovery fueled by high-margin international travel to Europe and other destinations abroad.

The sector slumped 2.7% on Monday. Delta Air Lines (ticker: DAL), American Airlines Group (AAL), and United Airlines Holdings (UAL), each lost at least 3.5%. Domestic-oriented carriers didn’t fare much better with Southwest Airlines (LUV), JetBlue Airways (JBLU), and Spirit Airlines (SAVE), all down 3% or more.

The sector has been in a rut for months, coinciding with another wave of Covid cases and new battles over masking and vaccination requirements in states like Texas and Florida—both now seeing near-record hospitalizations and deaths from Covid.

The pandemic’s resurgence is also igniting worries that the summer travel rebound may recede rapidly this fall, especially if business travel also slows.

Carriers including Alaska Air Group (ALK), American, Delta, and United have all trimmed their fall schedules. Indeed, nearly every major carrier is now planning a slimmer schedule , compared with expectations a few months ago.

“Based on filed schedules, the U.S. is seeing material close-in September and broad October cuts, likely reacting to both weaker demand and strained operations,” wrote Raymond James analyst Savanthi Syth in a recent note. 

The sector may be partially reflecting the weaker outlook; it’s down 15% in the past three months and is off 21% from its year-to-date highs in March.

Some analysts view the weakness as a buying opportunity. Seaport Global Securities’ Daniel McKenzie is sticking with his 2022 earnings forecasts, for instance, writing that the recent pressure is likely to be transitory and should reverse later this year.

A morning briefing on what you need to know in the day ahead, including exclusive commentary from Barron's and MarketWatch writers.

He doesn’t expect valuations to improve “until case counts fall and the risk to the economy shifts to the rear view mirror.” But he views Delta, American, and JetBlue as the best bets on the pullback.

Bernstein’s David Vernon also says that investors should stick with the sector. “We continue to see more upside in the large network airlines and reiterate our buy ratings on the group,” he wrote in a recent report.

Some analysts note that travel is recovering in states where the Delta wave may be peaking. Arkansas and Missouri, for instance, have seen gains in airport traffic, based on a seven-day average, since a peak in Delta infections in those states, according to Raymond James.

Still, the sector remains closely correlated to pandemic trends. And if you’re planning a trip to Europe, you’ll almost certainly need a vaccination card. Snap a photo of it too, in case you need to prove you’re inoculated to grab a bite in a café.


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