Written by: Alex Lowe
The long-awaited search for a COVID-19 vaccine appears to be over. Pfizer and BioNTech, hailed the 9th of November ‘a great day for humanity’ as they revealed a vaccine set to be 90% effective. This was followed by Oxford University and AstraZeneca’s vaccine, said to be as effective, but more readily available. If a vaccine truly is the requirement to any resemblance of ‘normal’ life, how will it impact sectors hit hardest by COVID-19? Whilst the positives appear endless, the debate has shifted onto how the vaccine will be distributed, and more importantly, who is to be vaccinated?
Since the start of the global COVID-19 pandemic in March 2020, a vaccine has been seen as the light at the end of a very dark tunnel. Its importance has never been in doubt, but its creation and timescale has been the question on everyone’s lips. The search for a vaccine seemsto have reached a conclusion. Pfizer and BioNTech found that no safety concerns had been raised in over 43,000 trial vaccinations, giving the green light for the final authorisation process, which has now be passed, igniting a logistics fight to distribute the billions of doses required worldwide.
One of the sectors that has been the worst affected by the pandemic is the aviation industry. At the virus’s peak in April, the International Air Transport Association (IATA), reported a 94.3% drop in passenger demand. This was due to vast areas of the global population being in strict lockdowns, and cross border travel being limited to business in exceptional circumstances only’. For the aviation industry this meant the pandemic becoming known as a period of share prices plummeting and job losses skyrocketing. Just to use one example of many, American Airlines made 19,000 redundancies in October, and their share prices fell from $29.20 on 10 February, down to $10.38 on the 16th of March. It has now only recovered to $14.94 on the 25th of November.
These figures show the devastating impact the invisible enemy has caused. The main reason for the downfall in aviation was the need for countries to control their own number of infections. Many countries adopted a testing policy meaning they had to test themselves before arrival. These proved costly and put customers off flying over the summer. Whilst the UK did not originally impose quarantines on arrivals, Brits found themselves having to isolate for up to two weeks when travelling abroad, meaning family get-togethers, and business conferences were conducted over zoom as opposed to people travelling.
The travel corridors and the unknown safety on flights meant the packed scenes on Bournemouth beach seen in May, were a much more familiar site than those normally seen on the Costa Del Sol over the August bank holiday. The IATA reported a 54% average drop for demand throughout 2020, and a potential £313 billon blackhole from consumer spending.
With the arrival of a vaccine on the horizon, companies are looking to the future. The market certainly responded with a boom after the vaccine was announced. The whole industry was given a boost, with TUI reporting a 10.2% rise in shares, with others such as EasyJet, BA and plane engine maker, Rolls Royce, all surging by around 5%.
The news of a vaccine seems to be an indication that in 2021, passengers will return. Despite this early optimism within the sector, there is some controversy around the use of the vaccine. The Australian based airline, Qantas, announced this week that they will not allow passengers on board if they do not have a vaccine. Qantas appear to be adopting a ‘no jab, no flight policy’. Their CEO Alan Joyce discussed the decision during an interview where he made clear that international travel would be off limits for those that do not immunise themselves against the virus. The more striking part of the interview was the reference Joyce made to discussions with other sector leaders, indicating that a ‘no jab, no flight’ policy could become the norm across the industry.
A major issue with this policy is that Boris Johnson has admitted ‘it could take months’ to vaccinate just the most vulnerable. So, at what point would introducing this policy become fair? If it comes in immediately on the arrival of the vaccine, could you not travel simply because the list of priority to vaccinate had not reached you yet? This would mean a continuation of the economic hardship faced by airlines at the moment because it will not be for months that large populations are vaccinated. Another idea policy could be to introduce ‘no jab, no flight’ policies when large populations have been vaccinated. The issue with this is that as stated, it could be months to reach that point. The would mean more tests and quarantine periods which have put consumers off flying this year. Either way, these questions are still unanswered, but there is likely to be a host of litigation between consumers, airlines and insurance companies as policies change, regulations change, and passengers are left confused as to their rights relating to unvaccinated travel.
Overall, despite the airlines already stringent rules regarding safety, the vaccine could potentially add another requirement to the list. The inconvenience of having to quarantine has been one of the main reasons for a downturn in 2020 travel. As has been suggested, the vaccine could solve this, but at what cost? All that is known for now is that long months of hardship in the industry is to continue until the vaccine distribution is vast, and people can travel risk free.