Heathrow Asks Airlines to Stop Selling Seats to Ease Chaos
Comment of the Day

July 12 2022

Commentary by Eoin Treacy

Heathrow Asks Airlines to Stop Selling Seats to Ease Chaos

This article from Bloomberg may be of interest to subscribers. Here is a section:

London Heathrow is imposing a two-month cap on daily passenger traffic, a dramatic response by the UK’s busiest airport to the flight chaos gripping Europe as airlines and ground crew struggle with a surge in travel demand. 

The airport will limit daily passenger traffic to 100,000 departing people through Sept. 11, asking airlines to refrain from selling summer tickets. Current forecasts are modeling for as many as 104,000 passengers a day over the summer, still below the roughly 125,000 passengers that left daily this time before the pandemic.

Eoin Treacy's view

Anyone who thought demand for international travel would never return to normal has been proven very wrong. If anything, pent up demand is contributing to even higher demand because people have been cooped up at home for so long. If China’s population ever get to travel again, tourist locations will be swamped.

Encouraging workers back to companies is the biggest challenge for policy makers everywhere. An economic contraction might solve that riddle by forcing people back into the workforce. Alternatively, wages will have to rise to at least compete with the jump in living costs. It is quite likely both will be required to rebalance the labour market.

Meanwhile the sharp pullback in oil prices today lent some much-needed support to the airline and cruise sector. International Consolidated Airlines posted an upside key day reversal. American Airlines rebounded emphatically. Carnival is steadying from the region of the 2020 lows.

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