What’s happening: While some countries such as Australia and New Zealand never lifted their travel bans, other governments that had relaxed restrictions are moving to tighten controls again in response to new coronavirus variants, dashing hopes for a rebound in global air travel.
Meanwhile, the Biden administration might mandate negative Covid-19 tests for domestic US air travel, according to Transportation Secretary, Pete Buttigieg.
Heathrow Airport CEO John Holland-Kaye said in a statement last week that Britain’s new measures are “essentially a border closure that will inevitably delay the country’s recovery and hurt the UK’s supply chains.”
Passenger volumes at the airport, once one of the world’s busiest, collapsed 89% in January compared to the same month last year.
If severe travel restrictions persist, international passenger demand could recover to just 38% of 2019 levels this year, according to the International Air Transport Association (IATA). Demand in 2020 was about a quarter of the previous year’s level.
“The world is more locked down today than at virtually any point in the past 12 months and passengers face a bewildering array of rapidly changing and globally uncoordinated travel restrictions,” IATA CEO Alexandre de Juniac said in a statement this month, adding that airlines will need continued financial support from governments to remain viable.
Why it matters: It’s not just airlines at stake. Thousands of companies rely on travel and tourism to earn an income. These firms employed 330 million people globally in 2019, according to the World Travel and Tourism Council (WTTC). The industry body estimates more than half of these workers have been laid off or are currently on furlough.
“We don’t see a clear exit strategy,” WTTC CEO Gloria Guevara told me. “It’s easy to close borders, but not that easy to open them.”
With very little guidance on when restrictions will be lifted — some UK officials are asking people not to book any holidays just yet — companies in this vital industry face an increasingly uncertain future.
All eyes on the US consumer
Walmart reports earnings for its holiday quarter on Thursday, promising to provide market participants with early indications of the financial health of US consumers.
Pandemic winner: Walmart’s stock has rallied nearly 25% over the past year, highlighting the company’s enviable standing in retail.
Investors will also be keeping a close eye on the performance of Walmart’s digital sales. The company has been building out its home delivery and curbside pickup options as more shopping moves online. Online sales jumped 79% between August and October, compared with the same quarter last year.
Looking ahead: The world’s largest retailer also introduced Walmart+ in September, a membership program to take on Amazon Prime. Investors will want to know how many customers have signed up thus far and will be looking to gauge how big the program might become.
Monday: EU trade and industrial production data