I flew from Japan to Toronto on March 1, finishing that journey on a puddle jumper to Ottawa. Like many Canadians, I have been dolefully wondering when I might next board an airplane.
Whenever the black curtain that now shrouds most of the world is lifted — and that may only come several months after a vaccine or a cure is found — the landscape will be much different than it was only two months ago.
Tourism was a luxury reserved for the wealthy when Britain created the modern travel industry by taking holidays on the European continent in the late 19th century. It was not until the 1960s and 1970s, with the advent of the jet airliners, that tourism to the far corners of the planet became affordable to many westerners. Canadians embraced this wonderful new world, jumping on aircraft and cruise ships to almost anywhere.
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Before all others, the most crucial question is whether many Canadians will still have enough savings or even jobs that will let them dash off to Patagonia, Phnom Penh, Pangnirtung or wherever their whims used to take them.
It may be hard to comprehend for folks used to cruising in the Caribbean every winter or enjoying the good life in Europe every summer, but whenever the coronavirus pandemic ends, many of them may once again regard tourism as an extravagance that will be well beyond their means for the rest of their lives.
This will be especially true if Ottawa tries to get out from under its debt load by taking the draconian step of reducing pensions, or at least civil service and military pensions, by 20 per cent or 30 per cent. That will kill many would-be travellers’ bucket lists.
Corporations and small businesses that depend on foreign trade face a similar quandary. Most of them have their own crushing debt problems and pension liabilities. Fewer foreign customers will be able to pay for the goods and services those companies offer. It is highly debatable whether many of them still want to shell out $10,000 for a quick business trip to Vietnam when words such as Zoom have suddenly entered our lexicon to describe face-to-face video meetings with scores of people that don’t cost more than a few bucks to set up.
Ditto for think tanks, universities and professional associations used to hosting international conferences with enough delegates to pack an NHL rink. Going forward, many conventioneers will understandably be anxious about flying to Las Vegas or Honolulu just to sit cheek-by-jowl for several days with people from everywhere.
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Another factor that may dissuade some from travelling afar, or even to New York, is that their calculations about where to go will be heavily influenced by whether theatres, museums, galleries and even parks will be open. The millions of Canadians with much thinner wallets may choose to go pickerel fishing or for a cross-country bicycle ride.
The broad outlines of the challenge ahead for those who badly want to travel again can be seen in the current air travel figures. Domestic air travel is down 96 per cent in the U.S. IATA, which represents air carriers, reckoned in its latest public report a few days ago that its members expected revenue to drop by $312 billion this year.
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Especially vulnerable will be my favourite train travel experience, Via Rail’s historic flagship, the Canadian, which runs from Toronto to Vancouver. That run already cost taxpayers $48.9 million in subsidies two years ago. With $394 million in overall federal subsidies in 2018, Via is likely to be one of the mendicants trying to push the airlines aside in the rush to ask Ottawa to keep them going.
How bad are things already? Sydney Airport announced on April 20 that it had borrowed A$850 million to help see it through a 97 per cent slump in traffic.
Few passengers will ever see it, but one of the few parts of the travel industry that is booming today is the obscure business of mothballing aircraft. Some 16,000 commercial airliners are idle around the world, including hundreds in Canada.
The stark gravity of the situation was revealed in Lufthansa’s shock announcement earlier this month that effective immediately, it was retiring six of its 14 Airbus 380 superjumbo jets. In doing so, it is walking away from a nearly $3-billion investment on aircraft that are, on average, less than nine years old.
Even if we can afford to travel, shrinking airliner fleets mean fewer flights flying to fewer places. This shrinkage will have an insidious effect on places that rely heavily on tourism. Nor has anybody a clue yet how many (or few) tourist-dependent hotels, restaurants, nightclubs, casinos and marinas will ever reopen.
Amid the gloom about the future of travel, a few outliers speak optimistically about what happens next. I don’t buy it, but Michael O’Leary, the boss of the biggest European low-cost carrier, Ryanair, is forecasting “a bumper year in terms of earnings next year” because of low oil prices and “massive discounting.”
That would be quite a comeback for O’Leary’s company. At present, 99 per cent of the Ryanair fleet is parked.
One of the few winners could be Airbus’s extraordinarily fuel-efficient A220 (formerly Bombardier’s C-series), which was designed in Canada and is made at Mirabel, north of Montreal. While many airlines have slashed or are delaying orders from Airbus and Boeing, Air France remains committed to buying 60 A220s, with the first of them to be delivered next year. Air Canada and Delta have also promised to honour their outstanding orders.
Though it sounds counter-intuitive, given that several cruise ships recently demonstrated that they were ideal breeding grounds for the coronavirus, bookings for some of these palatial floating leviathans are reported to be good for this fall and winter, albeit with steeply discounted fares.
This passenger demand may explain how the world’s largest cruise operator, Carnival Corp., which owns Princess, Holland America and other lines, has 18 new ships on order. The company was able to raise US$6 billion through a bond offering during the past few weeks, even though no cruise ships are going anywhere for several months at least.
On the other hand, Alaska will lose revenue because fewer because few ships will be making the Inside Passage or visiting Glacier Bay this summer. This is because the West Coast cruise hubs in Seattle and Vancouver, which anticipated 250,000 cruise passengers this year, will not accept any ships until July at the earliest. Alaska had been looking forward to revenue of US$793 million this season.
Airline companies, cruise ship operations and hotels will take a long time to reconstitute themselves. Many frequent travellers will be broke or fearful of catching the expected second or third wave of COVID-19 infections. Another likely hurdle: a quagmire of newly imposed visa restrictions and other government-imposed limits or outright bans on travel.
The upshot of this is that many Canadians are likely to spend more time at their cottages or travel more within their own country for the next few years. This should be a modest boon to Canada’s shell-shocked tourism industry. It has been heavily reliant on American visitors and, more recently, on European, Japanese and Chinese visitors who may now be as leery of travel to Canada as many Canadians will be about visiting those countries. As for winter holidays, reaching Florida by car will likely cost Canadians less than it did because gas prices are much lower, though this may be offset if the loonie tumbles further and ends up only being worth, say, 60 U.S. cents.
I had planned to fly to Europe, Asia and Western Canada this spring. Those trips have been postponed indefinitely. In hindsight, I was darn lucky to get to Tokyo and Okinawa just days before the coronavirus turned global travel upside down.
Only six weeks into isolation, like most Canadians, I have a bad case of cabin fever. I want to get going again.
Matthew Fisher is an international affairs columnist and foreign correspondent who has worked abroad for 35 years. You can follow him on Twitter at @mfisheroverseas.
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