From Alpha to Omicron

A Pandemic Pattern Begins to Emerge

Pushing Back: Inside The Issue

This has happened before, and now it seems like a pattern. Just when the airline industry says the worst of the pandemic is over, a new virus variant emerges. It happened earlier this year with the Delta variant, which took a bite out of airlines' third-quarter bookings and results. Now, the Omicron variant, first identified two weeks ago in Southern Africa, threatens to do the same.

Or does it? So far, airlines say bookings in the near term have taken a dip, but holiday bookings appear resilient. Few airlines are changing their plans or rejiggering their networks away from Africa, despite travel restrictions that swung into place more quickly than they did for Delta. Much remains unknown about the variant. Scientists believe Omicron will be more transmissible and could outcompete Delta, but it remains unclear if it is more lethal or if it will evade vaccines. When those are known, the results could show up in bookings and networks.

But a consensus is emerging that maybe this pattern will govern the way airlines operate for the foreseeable future, as Covid-19 goes from being a pandemic to an endemic disease. New variants and outbreaks will occur, and airlines will adjust capacity and schedules in response to demand. Governments are likely to react quickly and shut borders to buy time as scientists figure out how threatening the new variants are. But the big wild card is business travel. Already, fear of Omicron has cancelled several trade shows and conferences, and companies are delaying their office re-openings. How far has the new variant delayed business travel's recovery? That picture still is unclear.

Elsewhere in this issue, China moved toward clearing the Boeing 737 Max. Allegiant and Viva Aerobus propose a new kind of joint venture. Aeromexico's reorganization plan raises its creditors' ire, and Azul drops its plans to acquire Latam.

The Airline Weekly Lounge Podcast

This week Edward Russell and Madhu Unnikrishnan mull the new Omicron variant, and what impact it may — or may not — have on the airline recovery. Also, how EasyJet and SAS did during their 2021 fiscal years (hint: Lots of red), and the busy, yet uneventful, Thanksgiving holiday travel week in the U.S. Go here for a full archive of the podcast.