Trade body IATA warns that states will have to dig deeper in the coming months to support struggling airlines as travel restrictions continue to tighten in response to new strains of the coronavirus. While airlines entered the year with optimism, the roll-out of vaccines meant a recovery in air travel demand may be in sight, this has been tempered by a series of moves by states to curtail travel as several contagious coronavirus strains emerged. The UK on 27 January imposed mandatory isolation in hotels for visitors from countries where travel bans are in place. ”I think the short-term outlook has certainly darkened,” IATA chief economist Brian Pearce said during a briefing. ”The critical time will be the summer season, because that is when airlines make most of their money. This is the seasonally low-time of year for travel. The vaccine should make all the difference, so the second half of the year should be and feel very different to what it’s feeling like now. So we are hoping this is the dark before the dawn.” While the heightened restrictions are further impacting travel demand, Pearce says the association already had a “very conservative” forecast under which it expects traffic this year to be around half 2019 levels. ”What we have also seen is airlines getting very low yields on passengers, partly because they have been pricing to try to stimulate demand….so revenues have been worse than the passenger [traffic] situation," Pearce says. "So we will be looking at that closely when we come to update our outlook on cash burn, which is clearly going to be very significant in the first part of this year.” IATA estimates governments have already provided almost $200 billion of cash to help keep airlines “on life support” - a key reason for the relatively small number of carrier failures so far during the crisis. ”We are facing a really challenging first half of the year before the vaccines really start to make a difference to travel demand, the situation is getting worse,” Pearce says. ”Many airlines have been able to raise a lot of cash, not just from government aid, but from borrowing in the capital markets. But if the summer season is endangered, there will be a clear need for more cash to keep airlines alive.” IATA chief executive Alexandre de Juniac adds that against this backdrop, further state support for the sector is required. ”For the next six to eight months we desperately need government support by any means, cost reduction, tax relief, cash injections, subsidies. Everything.”

New Zealand’s international borders will likely remain closed off for the rest of the year, amid uncertainty over the rollout of coronavirus vaccines. In a briefing held after she met with cabinet members, New Zealand prime minister Jacinda Ardern said that borders would be “impacted for much of this year”. The prime minister adds that for international travel to safely restart, “we either need the confidence that being vaccinated means you don’t pass Covid-19 on to others – and we don’t know that yet – or we need enough of our population to be vaccinated and protected that people can safely re-enter New Zealand”. She notes that achieving these conditions will take time, and that her government was not prepared to “risk any of the gains we’ve made”. Her comments come as the country prepares to receive its first batch of vaccines by March, before rolling out mass vaccinations by the middle of the year. New Zealand has successfully in controlled the spread of the coronavirus within the country – allowing it to lift restrictions and get its domestic economy moving again. However, its international borders remain closed to prevent any local spread of coronavirus. Ardern adds that while the country will “continue to pursue” travel-bubble arrangements with neighbouring Australia and other countries in the Pacific region, “the rest of the world simply poses too great a risk for our health and our economy to take the risk at this stage”. She adds: “New Zealand will only truly feel like it has returned to normal, when there is a certain level of normality in the rest of the world too.” New Zealand’s announcement follows a similar move by Australia, which a week ago said it was unlikely its borders would reopen this year – even as a vaccination drive gets under way.

Aeromexico and LATAM Airlines Group have agreed to a code-sharing partnership under which Aeromexico’s flights to the USA will carry LATAM flight codes. The Mexican airline disclosed the partnership in a 26 January regulatory filing with the US Department of Transportation. In that document, Aeromexico requests that the US government approve the plan quickly, saying the airlines intend to implement it “in the near future”. Aeromexico intends only to carry LATAM codes on flights that original outside of Mexico, stop in Mexico City and continue to the USA. That means Aeromexico will not market LATAM-coded flights to passengers travelling solely between the USA and Mexico. Initially, the deal will apply to Aeromexico’s flights to Chicago, Denver, Houston, Las Vegas, Los Angeles, Miami, New York, Orlando, San Antonio, San Francisco and Seattle, it says.