Two of the biggest U.S. airlines are taking aggressive measures to ensure that as many employees as possible are inoculated against Covid-19. But what would really boost both vaccine uptake and airlines’ bottom line is a U.S. Covid health pass for air travel.
Delta Air Lines Inc. announced on Wednesday that employees who participate in its health-care plan would face monthly surcharges of $200 if they haven’t been vaccinated by Nov. 1. The news came just days after the Pfizer Inc.-BioNTech SE Covid-19 vaccine became the first to receive official approval from the Food and Drug Administration. Delta's policy isn't quite as hardline as that of rival United Airlines Holdings Inc., which told workers they need to be fully vaccinated (with some select valid exemptions) or face termination. But Delta's policy may ultimately be just as effective. A surcharge of $200 a month gets expensive very quickly. Delta said the penalty was necessary to address the financial risk unvaccinated individuals create for the company. The average hospital stay for Covid-19 has cost Delta $50,000 a person, the company said, and the employees ending up in the hospital these days are the ones who aren’t yet fully vaccinated.
Of course, employee hospital bills are the least of airlines’ financial woes at the moment. The highly transmissible delta variant is undermining a U.S. travel recovery that was just starting to show real momentum. That’s a contrast to Europe, where widespread adoption of health passes that show proof of vaccination, recovery from Covid-19 or a recent negative test is helping to bolster air-travel demand. Irish discount carrier Ryanair Holdings Plc said this week that recent strong booking numbers will keep it on track to hit its goal of carrying as many as 100 million passengers in the year ending March 2022. Among U.S. carriers, though, both American Airlines Group Inc. and Southwest Airlines Co. have warned in recent weeks that weaker demand stemming from the spread of the delta variant would make it more challenging to achieve their financial guidance. Meanwhile, the high level of Covid-19 cases in the U.S. is putting a budding recovery in transatlantic travel at risk as the European Union weighs reinstating travel restrictions on Americans.
At the end of the day, airlines have a business to run and it’s in their interest to do everything possible to make passengers feel comfortable with the idea of boarding a plane. This is why Delta the airline would rather call the troublesome delta variant by its scientific name, B.1.617.2. It’s why the airlines have bent over backwards to tout the benefits of their (quite good but not perfect) ventilation and filtration systems and supported a Transportation Security Administration face-mask mandate that was just extended through January of 2022. It’s why there was a domino effect on employee vaccine requirement announcements from other airlines once United made the first move, with Hawaiian Airlines and Frontier Group Holdings Inc. taking similar steps. But speaking for myself, I’m less worried about catching Covid-19 from a masked flight attendant than I am about getting it from an unvaccinated seatmate who may be less than enthusiastic about face coverings. While there’s obviously a political divide when it comes to vaccine requirements, they are more popular than one might think based on the headlines. A recent poll from the Associated Press-NORC Center for Public Affairs Research found that 57% of American adults support requiring vaccinations for air travel.
So far, the White House has resisted calls for broad vaccine mandates outside of government jobs, preferring to let CEOs lead the charge. But given the myriad complications and the industry’s role in interstate commerce, it’s unlikely the airlines will act of their own accord to require negative Covid tests or proof of vaccination to use their services. This is ultimately a government issue and the U.S.’s reluctance to enforce health checks for transportation increasingly puts it at odds with allies. Canada has said it plans to require commercial air travelers to show proof of vaccination. Starting Sept. 1, Italy will require passengers to prove they either have been vaccinated with at least one dose, recovered from Covid-19 in the past six months or have tested negative within the past 48 hours before they board domestic flights, long-distance trains and certain ferries. France also requires a health pass for domestic flights and long-distance trains, as well as restaurants and museums.
There will be some trickle-down effects on airline-passenger vaccination rates as a result of corporate pushes like United’s and Delta’s. Tyson Foods Inc., Goldman Sachs Group Inc. and Google parent Alphabet Inc. are among the other titans that have announced some form of a vaccine requirement for employees. These are well-known brand names and their decisions give smaller companies cover to follow suit. Perhaps that’s ultimately sufficient. But access to air travel is also a powerful incentive. The Kaiser Family Foundation is tracking two groups of unvaccinated individuals: those who are waiting until the vaccine has been available for a while to see how it's working for others, and those who say they will definitely not get a Covid shot. Of the former group, 41% said they would be more likely to get vaccinated if it was required to board a plane, according to msurvey results published in June. Interestingly, an air-travel requirement would also sway 11% of those who say they definitely wouldn't get a Covid-19 shot. That's a bigger draw than official FDA approval.
The U.S. government appears to have the legal latitude to require vaccines for travel, as long as certain religious and medical exemptions are allowed. A research article published in 2016 in the American Journal of Law & Medicine considered the issue of broader vaccine mandates for commercial flights as a means of improving uptake and protecting public health. It concluded that screening passengers on this basis “could be a legally viable tool” that falls within the authority of the federal government. The Federal Aviation Administration could provide interpretative guidance on unvaccinated individuals within the context of airlines’ right to refuse passengers deemed “inimical to safety,” wrote Christopher Robertson, now the associate dean for graduate and international programs at Boston University’s School of Law. The TSA and Centers for Disease Control and Prevention could also expand an existing public health “Do Not Board” list that restricts individuals with communicable disease from boarding planes to include vaccine status, Robertson wrote. The Secretary of Health and Human Services has “remarkably broad” authority (delegated to the CDC and the Surgeon General) to enact the regulation necessary to prevent the spread of infectious diseases, including from one state to another, he noted.
The financial interests of airlines and the interests of public health are clearly aligned. Here’s an opportunity for airlines and the White House to work together.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
More Global Markets Topics >
