Omicron clouds recovery of aviation, tourism sectors

DESPITE not much being known about the Omicron coronavirus variant, it has already created an uncertain outlook for the aviation and travel industries, challenging the nascent recovery these sectors have just begun to see since the pandemic hit last year.

DBS analyst Jason Sum notes that the outlook for the aviation industry has certainly turned more negative with the emergence of Omicron. "It is difficult to ascertain the extent and impact of this new variant without more information on its transmissibility and ability to evade vaccines."

He expects international travel restrictions to tighten over the next few weeks until more information about this variant first reported in South Africa is available. "VTLs with (the) UAE, Qatar and Saudi Arabia were recently deferred, and the government will likely hit the brakes on the extension of more VTLs for now."