Flight cancellations due to Covid could last until the end of February

Consultant André Castellini, director of Bain & Company Brazil, has just received an email from Latam saying that his family’s flight from São Paulo (SP) to Porto Seguro (BA) this week was canceled. “Fortunately, they put us on a new flight on the same day,” says Castellini, who has extensive experience in the aviation industry.

The convention of the American multinational Bain & Company, scheduled for this month in Las Vegas, in the United States, was canceled and rescheduled for March. “The company’s assessment is that there would be a lot of headache with the cancellation of flights around the world this month. They decided to postpone the meeting”, he says.

The two examples well illustrate the current moment of the civil aviation sector in the world: the speed with which the omicron variant of the new coronavirus is spreading has been causing a wave of flight cancellations, due to the contamination of the crew.

In Brazil, between last Thursday (6th) and this Monday (10th), more than 500 flights were canceled by Azul and Latam Brasil. Until this Monday, Gol said that none of its flights had been impacted by contamination by the crew.

In Castellini’s assessment, judging by the experience of South Africa, where the onomicron was identified, the most acute cycle of contagion should last two months. “We should see flight rescheduling until the end of February,” he says.

According to the consultant, flights are usually offered for sale between six and three months in advance of the trip. “Nobody knew about the omnin and its power of dissemination”, he says. “But now, after being taken by surprise, airlines can redo the contagion calculations, know how many of their flights can be operated and which ones should be cancelled”, he says.

In the latter case, airlines take into account flights with lower occupancy or those where it is easier to re-accommodate passengers. As a result, companies reassign staff who are off duty to be in reserve, that is, ready for work.

“That way, airlines can cancel flights in advance, without catching the passenger off guard”, says Castellini. “They are unlikely to hire more people now, because they would run the risk of having idle staff after the variant loses strength.”

One exception, however, is Blue. The operator is the most affected by the omni, because it was already operating at 100% of its capacity. THE leaf found out that the company is hiring pilots and, mainly, flight attendants.

Resumption of domestic tourism could be compromised

The new wave of contamination by Covid-19 takes the airlines at a delicate moment. January is vacation month. Businesses were celebrating the resumption of domestic tourism and approaching 2019 pre-pandemic occupancy levels.

This Monday (10), Procon-SP notified Azul, Latam and Gol asking for explanations about flight cancellations in recent days. Companies have until next Wednesday (12) to inform how many flights were canceled, how many passengers were affected, what is the forecast for the next 15 days and what contingency plan was adopted to minimize damages to consumers.

Procon-SP also wants to know how many employees have Covid and influenza.

In the opinion of XP analyst Pedro Bruno, the damage of the ômicron to the results of the airlines should be punctual, but compromise the first quarter. “Even considering that flight cancellations persist until the end of February, this impact should be diluted in the results of the companies throughout the year”, says Bruno, noting that Azul presented a faster recovery than rivals Gol and Latam.

XP, which monitors the performance of Azul and Gol, maintains its neutral recommendation to buy the shares. “The high of the dollar and of oil still weigh on the costs of the companies”, affirms Bruno.