LONDON—The global aviation industry is preparing to fly again. Heathrow Airport, one of the world’s biggest gateways, illustrates how hard that will be until governments decide how to allow overseas travel.
Big chunks of the U.S. and Europe are following Asia in reopening their economies as Covid-19 infection rates start to ebb. But despite signs of rebounding demand in sectors like retail, fliers so far aren’t returning to the skies in large numbers. United Airlines Holding Inc., for instance, is expecting June revenue to be about 90% lower than last year.
Airlines and airports are partly blaming a standstill in international travel on governments, for not lifting travel bans, quarantines and other restrictions more quickly. Australia’s Qantas Airways Ltd. said Thursday that it was canceling most international flights through October. The move came after the Australian government indicated it would keep its borders shut to most international travelers until next year to help curtail the spread of the coronavirus.
“In five or 10 years’ time the market will be bigger,” Heathrow Chief Executive John Holland-Kaye said. “But how quickly really depends on how quickly we can get countries to reopen their borders.”
Heathrow is Europe’s busiest airport and No. 2 in the world in terms of international traffic, behind Dubai. It is now at the center of a divide between industry executives and government and public-health officials over how and how quickly to resume significant international air travel. The U.K., for instance, has said travelers coming into the country will be subject to a strict two-week quarantine once they land. Airlines and Heathrow have fought back, but so far the government isn’t softening its stance.
“What we’re seeing in other markets is that they are starting to open up. Greece and Israel and Italy and Spain are starting to reopen their borders,” Mr. Holland-Kaye said. “We’re not seeing that in the U.K.” The British government says the measure is critical to prevent Covid-19 cases from entering the country.
This month will be a test case. On Monday, the European Union cleared its citizens to travel across the bloc, and in some cases beyond, many with minimal conditions. U.S. carriers—though cautious on how quickly fliers will return—have nevertheless promised to increase domestic capacity this summer. American Airlines Group Inc. expects domestic flights in July to be about 55% of its capacity compared with the same month last year.
American’s international capacity, though, is expected to remain at around 20%, reflecting a patchwork of global flying bans, differing requirements around the world for quarantines for passengers, and fast-changing guidance from countries over who can fly where.
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Last month, a flight operated by Eurowings, the discount arm of German flagship carrier Deutsche Lufthansa AG , flew to Sardinia only to discover that the government’s decision to reopen the airport had been reversed. The aircraft was forced to enter a holding pattern before returning to Germany without landing.
British Airways, owned by International Consolidated Airlines Group SA, had planned to use its Heathrow hub as the launchpad for its own substantial return to service in July. Those plans are on hold, said Willie Walsh, IAG’s chief executive.
The carrier, along with discount rivals Ryanair Holdings PLC and easyJet PLC, filed papers last week at the U.K.’s High Court to seek a judicial review of the measure.
British Airways’ flight crew wore face masks as they arrived at Heathrow Airport on June 8.
Photo: adrian dennis/Agence France-Presse/Getty ImagesMichael O’Leary, chief executive of Ryanair, which has its biggest base at London Stansted Airport, has called the policy impractical. The Irish airline last week also criticized guidance from the U.K.’s Department for Transport that passengers should avoid carry-on luggage.
The government “should stop issuing rubbish advice to passengers about baggage and instead focus their efforts on scrapping the U.K.’s useless visitor quarantine,” the airline said in a statement. The transport agency said the luggage measure would help quicken boarding and disembarking times and minimize the risk of transmission between passengers on the aircraft.
Passenger traffic at Heathrow hit a nadir in April, when just 206,000 fliers moved through the facility, down from nearly seven million in the same month the year before. In May, that number only inched up to 228,000, down nearly 97% from a year ago.
Terminal 2’s International Departure Lounge.
Photo: Heathrow/Equate Images
An arrivals board in Terminal 5.
Photo: Heathrow/Equate Images
Terminal 5’s arrivals hall.
Photo: Heathrow/Equate ImagesLast week, Heathrow Airport Holdings Ltd., a privately held company, said it was starting to offer voluntary severance packages to front-line employees, including security, cleaning and passenger-assistance crew. It had already cut a third of senior managers, and reduced compensation for some, including a three-month pay hiatus for the CEO.
Heathrow’s profits come almost entirely from fees on passenger tickets, meaning the drop in passenger numbers has decimated revenues. In a normal year, the airport makes around £3 billion ($3.77 billion) in revenue. Without the cost cutting, the airport says it would be losing around £250 million a month.
Heathrow’s lavish retail arcades, including its corridors of duty-free shopping, bars, restaurants and retailers like booksellers, drugstores and electronic-goods shops, are closed. The airport closed two of its four terminals and moved across 30 airlines to the open ones. It is using just one of two of its runways, and talks about building a third have been shelved.
Thermal screening technology in Terminal 2's immigration hall.
Photo: Heathrow/Equate Images
Staff hand out face masks to passengers without them.
Photo: Heathrow/Equate ImagesMr. Holland-Kaye said he has been working with his counterparts in global hubs like Hong Kong, Sydney and Los Angeles, among others, to coordinate their efforts and create a uniform experience for travelers in the post-pandemic age.
Heathrow has erected Perspex shields at check-in and security. Staff hand out face masks to those passengers without them. The airport is testing thermal scans of passengers, to screen out those with fevers; sanitizing security trays with ultraviolet light after each use; and finding new ways to route passengers through security cordons, away from staff.
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For now, the airport is adjusting to a new normal. Typically, air cargo is shipped in the underbelly of passenger jets and Heathrow only had about seven dedicated cargo flights a week. Now, it has 100 cargo-only flights, many carrying personal protective equipment for hospital workers and ventilators. Those passenger-less flights generate minimal revenue for the airport.
Heathrow had considered a full shut down at the beginning of March. There was also an option to convert one of its terminals into a makeshift hospital, a move later deemed unnecessary. The airport decided to stay open because the cost wouldn’t be much more than maintaining a closed facility.
Write to Benjamin Katz at ben.katz@wsj.com
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