New COVID-19 Quarantines, Travel Restrictions Crush Airlines, Tourism

The U.S. travel industry was already down and out from the impact of the coronavirus. Now it’s taken another one-two punch both domestically and internationally.

The European Union (EU) hinted that Americans would be restricted from entry due to the high—and apparently rising—US coronavirus rate. Then, in a new version of the “war between the states,” three US governors announced that travelers from eight other US states would have to quarantine for 14 days.

Predictably, the airlines swooned at the prospect of a further travel decline. On June 24, the Dow plunged 710.16 points, a 2.72% loss. US airlines doubled that, with American Airlines (AAL) dropping 6.86%, Alaska (ALK) declining 6.62%, United (UAL) diving 8.34%, Southwest (LUV) losing 7.19%, and Delta (DAL) shedding 7.76%. Jet Blue (JBLU) dropped 9.57%, nearly 10% of its value. Disney (DIS) also announced that day that it was postponing the July 17 opening of major travel destination Disneyland ‘indefinitely’ due to coronavirus concerns.

(Full disclosure: I own stock in Southwest Airlines, American Airlines and Jet Blue.)

What happened?

The EU is preparing to open its borders on Juy 1 for travel by EU residents. Residents of countries outside the 26-nation Schengen Area will also be able to visit. But the EU reportedly will not open up to residents of nations that it deems ineffective in fighting the coronavirus. The U.S., where new coronavirus infections just hit an all-time daily high of 45,500, is apparently at the top of the list.

Then, Governor Cuomo of New York, plus the governors of New Jersey and Connecticut said in a joint announcement that “individuals traveling from states with significant community spread of COVID-19 must quarantine for 14 days.” The quarantine applies to any person arriving from a state with a positive test rate higher than 10 per 100,000 residents or with a 10% or higher positive rate over a 7-day rolling average. Right now, those states include Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Utah and Texas.

Are these appropriate reactions, or overkill that will further damage the already-wounded $2.9 trillion tourist industry? For example, exactly none of the world’s 200-plus Airbus A380 superjumbo jets, each capable of carrying 500 passengers, are currently flying.

Dr. Robert Quigley is Senior Vice President and Regional Medical Director of International SOS and MedAire. The company says it has 12,000 clients and serves 89% of the Fortune Global 100 with its health, security, risk management and other services.

“There is an economy that is being severely beaten now,” Quigley says. Although ISOS gets five million calls or “touches” from clients a year, there is limited cross-border travel. Clients who have been classic “road warriors” are now “not traveling but managing those who do,” or using ISOS to help them manage COVID-19 risks in their worldwide operations. For business travelers who must travel during the pandemic, Quigley says, “Not a lot has changed.” With COVID-19 still out there, “They will be screened wherever they go, they may be forced to quarantine as well.”

Quigley, an immunologist, says “We can’t afford to have a second wave.” For the EU, which suffered thousands of deaths in Italty, Spain and France, he believes the thinking may be, “We can’t afford to have people come in from the new epicenters.”

In the absence of a vaccine, the world response to the novel coronavirus is “All based on mitigation and containment,” Quigley says. That means to lessen the odds of virus spread, follow the mantra of socially distancing, wearing a mask and washing your hands holds. “People are getting pandemic fatigue, “he acknowledges, but “Until we get herd immunity, through a vaccine or everyone infected, we have to live like this.”

Europe’s borders are most likely to be reopened to countries that can be put on a “safe list.” That means nations with a relatively low rate of new COVID-19 infections like Europe’s rate, currently 16 per 100,000 over the last 14 days. But the current rate for Russia is reportedly 80 per 100,000, 107 per 100,000 for the U.S. is 107 and 190 per 100,000 for Brazil.

On the other hand, the United States has also barred foreign nationals due to coronavirus concerns. According to the US Centers for Disease Control (CDC) foreign residents who have spent time in various countries during the last 14 days “may not enter the United States.” As of June 15, the list includes China, Iran, Brazil, the United Kingdom, the Republic of Ireland, and yes, the entire 26-country Schengen Area. The U.S.  is “unlikely to lift that rule without reciprocal action for Americans by the E.U.“ As Dr. Quigley notes, “It’s a problem that the European and US travel bans have not been coordinated.”

For Europe, at least it will be easier to restrict entry at its borders, particularly at airports. Less clear is how the NY metro area governors will compel visitors and returning residents to undergo a 14-day quarantine. New York Governor Cuomo suggested “police could potentially pull over drivers of cars ‘with Florida license plates’ and investigate whether travelers are obeying the rules.” In addition to such spot checks, he said co-workers might snitch on colleagues who recently visited a state on the quarantine list.

Most enforcement will apparently be on the honor system, rather by shotgun-toting state troopers at the borders. It’s easy to think of ways to get around a quarantine (fly from Florida to Philadelphia rather than LaGuardia or Newark, then take a train, bus or rental car into New York) but fines will be $2,000 for the first violation, $5,000 for the second and up to $10,000, Cuomo said, if a person “causes harm.”

Many believe that such quarantine rules are unnecessarily stringent. Hawaii is currently being sued in a lawsuit supported by the Justice Department over its 14-day quarantine. And some claim that a certain amount of tit-for-tat involved, as other states hunted for cars with New York license plates when that state was seen as the epicenter of the virus.

Rather than turning travelers away or demanding a quarantine, couldn’t Europe and US states accept a temperature or coronavirus test? “Temperature screening is a good screener but far from perfect,” says Quigley. “People slip through the cracks.” As for testing, “that could be effective, if the number of false negatives and positives was low—but you’d have to do it on arrival. The test is only as good as it is that day, so that means screening as you are about to board. Until we have the vaccine, none of these things will be perfect.”