United Airlines says Mexican beach destinations saw the biggest drop in demand after the US announced new testing requirements for travelers
- United Airlines says Mexico is among its most impacted destinations due to new US testing requirements.
- The CDC will soon require US arrivals to have a negative COVID-19 test.
- United executives hinted at an upcoming rollout of digital tech to keep track of travel requirements.
The US government just made it harder for Americans to plan getaways south of the border, and airlines are already feeling the impact.
United Airlines told reporters on its fourth-quarter earnings call that Mexican vacation destinations were among the highest impacted by the Centers for Disease Control and Prevention's new testing requirement for international travelers.
"The demand trends have not really changed much in most places, including overseas," Andrew Nocella, United's chief commercial officer, said in response to a question about the CDC's order. "Where they have changed is in the Mexican beach resort destinations and certain Caribbean resort destinations."
Effective January 26, all travelers entering the US by air must present a negative COVID-19 test result from the three calendar days leading up to departure, according to the State Department. It's the first testing requirement implemented by the federal government since the start of the pandemic in March 2020, as individual states took up the burden of testing and quarantine requirements for entry.
The US, Canada, and Mexico had agreed to close land borders to non-essential traffic during the pandemic but air borders between the US and Mexico largely remained open, allowing Americans to head south with ease. Mexico, unlike most locales open to Americans during the pandemic, also doesn't require visitors to present a negative COVID-19 test upon arrival.
Popular beach and resort destinations like Cancun and Cabo San Lucas have soared in popularity as a result. Most of the US' major international airlines shifted their route networks to accommodate the shift in demand and some upgrading Mexico flights to wide-body aircraft.
Other United destinations with strict testing requirements didn't see a large change after CDC order, however, with demand remaining comparatively low.
"Because most of the world already had some type of requirement for testing or quarantine in place, most of the world I don't believe - based on the numbers we're looking at - had a negative impact based on the announcement from a few weeks ago, and what's going to happen next week," Nocella said.
Traveling to Mexico, on the other hand, was almost as easy as traveling between American states, due to a lack of testing requirements by national governments on both ends of the journey. While the requirements dealt an immediate loss to the airline, executives took the optimistic point of view that the changes will ultimately be positive for safely restoring travel.
"There's no doubt the testing requirement is a short-term negative, but as these tests get out there and that it reopens borders not only to Mexico but around the world, we think that's a good medium and long-term change and will prompt more and more demand," Nocella said.
United is also crafting digital technology to ensure flyers are best suited to meet the requirements of their destinations when deciding to travel, hinting that an announcement on the new tech would be coming soon.
"We'd like to get people moving again and we know this is the way to do it, and we have plans in place that we will detail very shortly that describe exactly how we're going to do that," Nocella said.
"We're going to work really, really hard to make sure it's really, really easy to travel with United with the new testing requirements," Toby Enqvist, Senior Vice President, Chief Customer Officer, said.