U.S. President Joe Biden signaled progress toward lifting a ban on travel from Europe, raising hopes for a reopening of the almost US$40 billion North Atlantic air corridor 16 months after flights were grounded by COVID-19.

Shares of Air France-KLM, Deutsche Lufthansa AG and IAG SA gained in Europe after Biden said his COVID-19 advisers are weighing when to lift the prohibitions, while U.S. airline stocks also rose in pre-market trading. German Chancellor Angela Merkel raised the issue in a White House meeting on Thursday.

“It’s in process now,” Biden said at a news conference with Merkel following their meeting. “I’m waiting to hear from our folks, our COVID team, as to when that should be done.”

He said to expect an answer “within the next several days.”

Removing the ban would be a boon for carriers on both sides of the Atlantic. Former President Donald Trump barred entry from most of Europe, including the U.K., in March 2020, and Biden extended the policy early in his term.

The Bloomberg EMEA Airlines index jumped as much as 2.9 per cent. Rolls-Royce Holdings Inc., which makes engines for the wide-body aircraft that ply long-distance routes, traded 2.2 per cent higher as of 2:48 p.m. in London. Major U.S. airlines such as United Airlines Holdings Inc., American Airlines Group Inc. and Delta Air Lines Inc. logged modest gains shortly after the market opened in New York.

“It’s good news for the sector, a bit of optimism,” said Daniel Roeska, an analyst at Bernstein. “The timeline will be important. In any case it will likely be too late for summer vacationing but it may be in time for business travel in September and October.”


Major market

Transatlantic routes are especially important for airline profit, because they comprise by far the biggest market for premium long-haul travel.

Flights between Europe and North America attracted 88 million passengers in 2019 and generated US$37.5 billion in sales, according to the International Air Transport Association. Both metrics fell more than 80 per cent last year as the virus led to a shutdown in cross-border trips.

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European governments have grown increasingly frustrated with the Biden administration for refusing to lift restrictions that prevent most of their citizens from traveling to the U.S., with officials citing inconsistent rules, economic costs and an outdated strategy for halting the coronavirus.

Fully vaccinated Americans can now travel to most European countries, and a quarantine requirement going to the U.K. is set to be lifted next week.

But the U.S. hasn’t reciprocated, leaving half the market unfulfilled.

Americans living in Europe have generally been able to travel to and from the U.S. throughout most of the pandemic.