Excerpt from CNN
Just when US airlines thought they were on the verge of profitability again, along came the Omicron variant to put those hopes in doubt.
Leisure travel is back to near pre-Covid levels. This Thanksgiving marked the busiest week for air travel since the start of the pandemic. But major US airlines had been counting on a return of their most lucrative revenue sources: business and international passengers.
The emergence of the Omicron variant could put those passengers on hold, according to experts.
"I think the year-end holiday travel is booked and will go forward. But the plans for international travel and business travel, I would imagine there will be a wait and see attitude on those," said Philip Baggaley, chief credit analyst for airlines at Standard & Poor's.
Business travel has remained a fraction of its pre-pandemic level partly because many offices remain closed or have limited staffing. That had been expected to turn around in January with many major employers announcing return-to-office plans for after the holidays.
Airline analysts worry that the uncertainty about Omicron and the overall rise in Covid cases could delay those reopening plans.
"If offices are delaying reopening, there is less reason for business travel," said J.P. Gownder, an analyst at Forrester.
Gownder said that it's too soon for many businesses to have made a decision to delay the reopening. But the rise in new US cases as the weather has turned colder and people have moved inside has already prompted some delays, most prominently by Apple, which is reported to have pushed back its return to office plans from early January to February —even before the news of the Omicron variant. Gownder said the decision on having workers in the office will be a moving target for most major companies.
"Microsoft had some good language. It said, 'our ability to be together in person will wax and wane,'" he said.
Many public health officials say it will take a couple of weeks to know the threat posed by Omicron. While there are no confirmed US cases of the variant yet, almost all experts believe it will find its way here, if it's not here already.
Gownder said the risk posed by the variant, and the decision on when to reopen offices, will depend upon how resistant to existing vaccines the Omicron variant turns out to be, whether it becomes common, and whether it causes an increase in hospitalizations and deaths.
"The truth is it's too early to know what the impact is going to be," he said.
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