April 26 - Big news for airlines as the head of the European Commission stated in an interview that fully vaccinated US tourists may be welcome this summer. While the details are still being worked out, Ursula von der Leyen, president of the European Commission, offers a huge glimmer of hope for airlines battered by the crisis and hoping to see some transatlantic action.

 

EU may welcome US tourists this summer

In an interview with the New York Times, Ursula von der Leyen stated that talks between the European Union and the United States are ongoing over reopening for tourism, but recent vaccination progress in the US bodes well.

 

She specifically stated the following in the Times interview:

“The Americans, as far as I can see, use European Medicines Agency-approved vaccines. This will enable free movement and the travel to the European Union."

 

The US predominantly gives its citizens the Moderna, Pfizer/BioNTech, and Johnson & Johnson shots, which are all approved for use in Europe. The US has also made excellent progress in the vaccination drive, and all adults in the US are now eligible to receive the vaccine if they desire. A vaccine for children under the age of 16 has not been approved, but trials and regulatory review are ongoing.

 

Few details, but a glimmer of hope

For over a year, travel between the US and Europe has been significantly reduced. The two major government actions included President Trump announcing a ban on foreign nationals who had been in the EU, UK, and Ireland from entering the US, and then later actions by the European Union limiting nonessential travel.

 

This is one of the most prominent statements from a high-level official in Europe, indicating a reopening potential. There is no timing on when Europe will reopen for vaccinated tourists, but it seems clear Europe will require all tourists to come with a vaccination certificate.

 

Digital health passports could be a large part of the solution. However, the EU and the US will likely push for paper records to be accepted for travelers who are uncomfortable with uploading a vaccine certificate to a digital platform or those who do not have access to such technology.

 

Case counts and vaccinations will drive when Europe reopens. Assuming Europe can get the virus under control and vaccination drives in Europe ramp up as America moves closer to adult herd immunity, it would not be implausible to envision a late-summer opening in the third quarter, driven by vaccine passports.

 

Airlines are pushing for a European reopening

US and European airlines traditionally rely on the lucrative transatlantic market for higher-yield and higher-margin flights. Buoyed by a combination of leisure and business travelers, the US and Europe remain well-connected, especially in the summer. As such, multiple airlines have been pushing for a broader European reopening for vaccinated passengers.

 

Before this statement from Ms. von der Leyen, Greece and Iceland have already outlined plans to accepted vaccinated tourists. Other countries are likely to follow in the coming months, especially if the EU officially gives its blessing to countries to allow leisure travel, assuming passengers can prove their vaccinated status.

 

American Airlines has devoted a paltry 3% of its capacity to European and Pacific markets. Other carriers have also significantly cut back international markets but have recently added new flights to destinations that have stated they will welcome Americans. This includes new flights from Delta to Iceland and Greece, while United is adding new services to Iceland, Greece, and Croatia.

 

If Ms. von der Leyen’s statement comes to fruition, airlines could end up scrambling to point more planes across the Atlantic to catch up with pent-up demand for leisure travel. For now, this is the clearest indication of appetite at the upper levels of the European government to reopen borders, which could come as soon as this summer.

 

 

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