Contaminated Travels

"If you want to be a Millionaire, start with a billion dollars and launch a new airline." Those were the famous, or perhaps infamous for many invested parties, words of Richard Branson. Flying has always been risky business, both for those with Aviophobia and those that have sums of money invested in these companies.

To start with, the fixed, or operating, costs are eye watering. Airplanes come with high costs and many airlines lease them or buy them through large orders. Neither of which can be easily manipulated under tough conditions. They also have to pay for spots at airports and need a monstrous workforce for things like maintenance of the aircraft and the pilots, stewardesses/steward, as well as those that handle luggage. During any downturns if airlines were to drop many of these workers, it would come at an equally great cost. Due to the mechanical nature of airlines, cutting down on payroll staff often means closing down full routes altogether.

While sufficiently haunting enough, that isn't all. Airlines have a shabby at best and villainous at worst, reputation amongst the general public. Cramped seating, tasteless cuisine, long waiting lines, it doesn't take long to list the grievances of their customers. As expected, the general population isn't very keen on filling their coffers. Another thing that doesn't help their dwindling income is that customers have non-existent loyalty, thus leading to fierce competition based solely on price. This leads to a vicious cycle of decreasing quality and diminishing profits simultaneously.

Accelerating aforementioned cycle came the villain that is currently dominating across the board- Covid-19. One of the first measures in effect of the virus were to close borders. Initially limited to cutting of leisurely or recreational travel, it soon expanded to virtually all travel and air shipments as countries locked down their borders. The US was one of the early movers as it declared a lockdown of travel with the schengen area, not including UK initially.

It didn't take long for Britain to be included in the now blanket ban. India is another country which has gone hermit and so has New Zealand, closing borders much earlier than expected. This all had a catastrophic effect on airlines, as by mid march airlines in Hong-Kong reduced travel by 80 percent, while Italy lost around 74. Overally, air traffic has dropped by an eye watering 80 percent.

As expected, the stop in travel obviously corresponds to a cliff drop in tourism. WTO, the world tourism operation, reported that of the 217 travel destinations they tracked 45 percent had a complete ban on any passengers entering the country. 30 percent have totally or partially suspended all international flights and the remaining either have a ban from specific countries or at least a mandatory 14 day isolation period upon arrival. While this certainly punctures a humongous hole in each countries economy, there are some that have piled too many eggs in the tourism basket for comfort.

France is the country with the highest number of visitors, with nearly 89 million people making the journey to the country boasting the louvre. It is followed by Spain with 83, breathing on whose neck is the US with 80 million and China not too far behind with 63 million of its own. While these numbers may seem daunting now, they aren't completely reliable on portraying which countries will be reeling the most. Tourism, while a bulging contributor, falters in comparison to the vastness of the US economy, making around 2 percent of its GDP. France, on the other hand, will certainly face the heat as the heap of the tourists venturing to the Eiffel Tower made up to 9 percent of it's gross. The french certainly won't be saying bien, when asked 'comment ça va?' anymore.

Italy, a country home to 50 UNESCO world heritage sites is unsurprising in its 60 million tourists. Tourism employs just under a fifth of the counties entire workforce, around 4 million people. No wonder its estimated that Covid-19 could end losing taking over 22 billion euros out of Italy's pocket. Its economy was already sludging along due to the high dept to GDP ratio, standing at an alarming 134.8 percent of the GDP, and an unemployment rate of 9.7 percent, making Italy one of the most vulnerable countries in Europe. Its ironical then, that Italy is also one of the worst hit countries worldwide.

Italy has over 200 thousand confirmed cases and just under 30,000 deaths. These numbers when put in perspective with its small population, could turn anyone's face the colour of the leaning tower of pisa. It isn't Italy's first time being hit hard by a disease, during the infamous 'Black Plague' that ravaged the world in the 14th century, it was the worst affected. The parallels don't end there, the bubonic plague of the 1300s was also imported from China, travelling through merchant trade routes. Talk about deja vu.

Of course the ancient ruins of Italy are eyecatchers, but it appears that the pearly beaches of the Maldives will be facing the roaring wave at its highest amplification. The island nation has the highest ratio of its GDP reliant on the now dead tourism industry, standing at a staggering 66 percent. There is no wonder then that it's GDP has fallen by 17 percent, only expected to decline.

There isn't much that this pandemic will leave untouched. The ripples are felt across borders and industries, leaving nothing safe. Debt reliant and smaller economies will find it harder to stomach the loss compared to behemoths like the US or China and even harder to pay for large stimulus packages that these countries desperately need. Nonetheless, the initial response, as it rightly should be, has been concentrated on limiting the damage that the pandemic does to the health of their populations rather than their economy. Shifting priorities are emerging, however, as countries, like Italy and Spain, begin to ease their lockdowns. As people step out of their houses, they may not like what they find.