The ultimate shot in the arm

IF global sharemarkets are any indication, the relationship between the travel sector and several promising vaccine trials is a healthy one. Stocks in multiple airlines, cruise operators and hotels all enjoyed a nice bump in their respective share prices following news that three drug companies had produced encouraging coronavirus vaccine trial results. The implication seems obvious, suppress the virus and free the travel industry.

Moderna, Pfizer and AstraZeneca have all produced vaccines for COVID-19 capable of creating immunity with an efficacy up to or above 90% in clinical trials, creating a predictable buzz around travel that a resumption of relative normality might not be too far away.

Flight Centre’s MD Graham Turner is one travel leader showing plenty of optimism for the medium-term outlook as the pharmaceutical tide starts to turn, stating in an address to shareholders last month that the future looked “fairly bright” if a vaccine were to be sanctioned and begin distribution in the first quarter of 2021.

“While demand for international travel is unlikely to fully rebound for several years, we see opportunities this year and during the recovery phase…as business and governments work together to develop reopening plans that address any ongoing health concerns and incorporate potential game-changing developments like rapid antigen testing and effective vaccines,” he said.

Some of the key metrics in Australia have also started to show signs of life again directly following positive vaccine announcements, with News Corp Australia credit card data showing consumer spend in Australia enjoyed its best week since March late last month, demonstrating solid improvement across both the airline and accommodation verticals.

And while this all looks very promising, it remains prudent for the travel industry not to get too far ahead of itself as it continues to do battle with the biggest existential threat in its history.

There is still technically no precise timeframe for travel recovery, just reassuring results from trials with rough estimates about global distribution. So, there should be no shirking of the reality that a COVID vaccine represents one of the largest logistical challenges in human history, with global immunity unlikely to be just around the corner.

If Federal Health Minister Greg Hunt is correct in his approximation, Australia should see a vaccine made available to the public at scale by early in the third quarter of 2021, in line with a government goal to get most of the country immunised by the end of next year, hinting that “widespread international travel” should be back to normality from that time.

However, one aspect that typically gets lost in these types of forecasts is the willingness for enough people to take the vaccine to be effective. Medical experts suggest that for herd immunity to be achieved, there needs to be a national take-up of between 60-70%, but with the anti-vaxxer movement perhaps stronger than it’s ever been before, the transition to national immunity may not be all smooth sailing.

This is clearly a point not lost on Qantas CEO Alan Joyce, who recently took a harder stance than any of his rival airlines by warning, no jab, no flight.

Only time will tell whether the coronavirus vaccine is the economic cure-all many are hoping it will be.