European, U.S. Airlines Scramble To Cope With Trump’s 30-Day Travel Ban

European airlines, already reeling from falling demand and travel restrictions due to the coronavirus outbreak, were scrambling to cope with a new headache: U.S. President’s Donald Trump order to ban flights from 26 European nations for a one-month period.

Trump’s order will also prohibit most foreigners who have traveled in Europe over the past two weeks from entering the U.S. for one month.

U.K. and Ireland are exempt from the order.

The ban will also not apply to legal permanent residents of the U.S. nor to immediate relatives of U.S. citizens.

Trump also criticized European governments for failing to take more stringent measures to halt the spread of the virus.

Airlines across the world have already responded to weakening demand by cutting flights, reducing salaries, hiring freezes and encouraging workers to take unpaid leave.

In response, the European Union criticized the decision. “The coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action,” the European Commission, the EU’s policy-making body, stated.

A Commission spokesman said officials were still figuring out the full scope of Trump’s order.

Henry Harteveldt, a former airline executive and founder of travel consulting firm Atmosphere Research Group, warned that the virus could depress airline traffic for months to come.

“A lot of people who were considering a trip to Europe may no longer do so,” he said.

Many Europeans could likewise cancel trips to U.S. even after the ban is lifted.

Valerie Boned, secretary general of Les Entreprises du Voyage, a French association of travel agencies and tour operators, said up to 400,000 French people were expected to travel to the U.S. over the next three months.

“Now everything is stopping. The repercussions are huge, particularly for agencies specialized in business travel,” she said.

Europeans form a vital segment of U.S. tourism.

In March 2019, European visitors to the U.S. represented 29% of arrivals and $3.4 billion of spending, said the U.S. Travel Association.

“Temporarily shutting off travel from Europe is going to exacerbate the already-heavy impact of coronavirus on the travel industry and the 15.7 million Americans whose jobs depend on travel,” U.S. Travel Association President Roger Dow said in a statement.

Shares of budget carrier Norwegian Air Shuttle, which has increased its flights to U.S. in recent years, tanked more than 20% on the ban.

“I can’t recall anything that comes close to this,” said Peter Harbison, chairman at the Australia-based research firm CAPA-Center for Aviation. “On a global scale it’s the most difficult environment for airlines ever in modern times.”

“We are fully aware of the latest developments concerning travel between certain European countries and the U.S.,” a spokesperson from Norwegian Air told CNBC. “Our flights to and from U.S. are currently operating as normal.”

Lufthansa, Germany’s biggest airline, said that it was “currently assessing the impact” of Trump’s order. “In this context, the safety and well-being of our customers and crews remains/is our highest priority,” Lufthansa added. “We’re still trying to understand what concretely this ban means as we don’t yet have a decree in front of us.”

The order will also hurt U.S. airlines.

“This action will hit U.S. airlines, their employees, travelers and the shipping public extremely hard,” Nicholas Calio, president of Airlines for America, a trade group. “However, we respect the need to take this unprecedented action and appreciate the Administration’s commitment to facilitate travel and trade.”

Sara Nelson, president of the Association of Flight Attendants, called the Europe travel ban “irresponsible.”

“We know [Trump’s] address will add greatly to the panic already spreading across the country and contributing to the dramatic drop in bookings,” she said. “The conflicting information and failure to focus our nation on saving lives is making this crisis worse. We are calling on all leaders in government to focus on solving the problem.”

She added: “There is no explanation for how this will help fight the spread of the virus. It makes little sense when the virus is already in the United States.”

“This is going to cause a lot of people on both sides of the Atlantic to reconsider where they are going to spend their summer vacation,” said Harteveldt. “Leisure travelers will stay close to home.”

FlightAware, a flight-tracking service., said there are almost 400 daily flights from Europe to the U.S.

Forbes reported that U.S.-European routes have “historically been highly profitable” for airlines. For example, in 2019, United Airlines (UAL) generated about 17% of passenger revenue from trans-Atlantic flights; Delta Air Lines (DAL) 15%; and American Airlines (AAL), 11%.

In 2017, EU residents, excluding the British, made 8.5 million trips to the U.S.

American Airlines, which operates up to 15 flights a day to five countries affected by the ban, was “in contact with the federal government to understand and comply with this directive,” said airline spokeswoman Shannon Gilson.

William Reinsch, a former senior U.S. Commerce Department official and fellow with the Center for Strategic and International Studies said the order will be “enormously disruptive” to airlines, hotels and restaurants on both sides of the Atlantic.

“I think the [Trump] administration will be forced to provide some relief to the airlines,” he said.

“The ban on flights on Europe will really zap foreign carriers,” said aviation analyst Mike Boyd of Boyd Group International. “Delta has alliances with Air France KLM, which will be shut down in trans-Atlantic markets. United’s alliance with Lufthansa leaves it with zero access to the E.U. That sounds dire, but the fact is that with the news of the spread of the virus in Europe, the flights would be empty anyway.”

Forbed added that the President’s emergency order is “guaranteed to cause airlines serving the trans-Atlantic market to ground a large number of planes - planes that they likely will need to continue making loan or lease payments while they sit idle. For that and related reason, some carriers are likely to begin retiring older planes earlier than previously planned, especially since several already had said they were considering such actions prior to Trump’s announcement Wednesday night.”