COVID-19 Aviation Impact: CAPA Daily Update – 13-Mar-2020
Welcome to the latest edition of CAPA’s new daily Coronavirus and Aviation global update. We offer this new product to our active CAPA Members, as well as visitors to our website to help our industry navigate through this crisis.
Top news headlines:
- CAAC - Chinese airlines report USD3 bn loss in Feb-2020;
- India: Indian Government suspends 'all existing' tourist visas from 13-Mar-2020 to 15-Apr-2020.
The latest Novel Coronavirus (COVID-19) Global Situation
118 countries now affected
Honduras, French Polynesia, Cote d Ivoire and Turkey were added to the list of countries reporting COVID-19 cases, taking the total to 118.
Top ten locations for COVID-19 excluding China (12-Mar-2020)
China cumulative cases (12-Mar-2020)
Top ten highest increases by location (12-Mar-2020)
Global cumulative cases excluding China (12-Mar-2020)
Air Capacity Update: Spotlight on Germany. Lufthansa adjusts US capacity
Outside China, countries within Europe are by far the most impacted by the COVID-19 outbreak. Six out of the top ten countries are from this region and the growth in cases does not seem to be slowing.
Yesterday, 12-Mar-2020, the United States Government announced it would restrict and suspend the entry into the United States of all those who were physically present within the Schengen Area during the 14-day period preceding their entry or attempted entry into the United States.
This comes as countries like Denmark, Switzerland, Austria and Sweden see the growth of cases exceed 50% above the previous day.
Today, we take a closer look at Germany, who has consistently been in the top ten countries with confirmed cases.
Germany weekly total system seats capacity w/c 09-Mar-2020, prior to the Trump announcement
Lufthansa Group announced (12-Mar-2020) plans to maintain the following schedule to the US and other long haul markets in light of new travel restrictions in place for European, Swiss and other nationalities:
- Lufthansa Group airlines will continue to operate from Frankfurt to Chicago and New York Newark, from Zurich to Chicago and New York Newark, from Vienna to Chicago and from Brussels to Washington DC after 14-Mar-2020 in order to maintain some capacity for travellers exempt from the travel ban;
- All other routes to the US will be suspended until further notice due to restrictions in place, including all departures from Munich, Duesseldorf and Geneva;
- Lufthansa Group will continue to operate as normal to Canada until further notice;
- Recent adjustments for entry regulations for India are also being evaluated by the company. [more - original PR]
Deutsche Lufthansa AG weekly total system seats capacity w/c 09-Mar-2020
Aviation & Travel Industry updates
EAL: Work resumption in China produces 30% year-on-year spike in outbound cargo
China: CAAC - Chinese airlines report USD3 billion loss in Feb-2020
CAAC reported China’s civil aviation recorded its largest monthly loss of CNY24.6 billion (USD3.5 billion) in Feb-2020, including CNY21 billion (USD3 billion) loss for the country’s airlines (Carnoc.com, 12-Mar-2020). Overall industry loss for the first two months of 2020 reached CNY17.6 billion (USD2.5 billion).
Australia / New Zealand: Australian PM announces 'level three travel advice'
India: Indian Government suspends 'all existing' tourist visas from 13-Mar-2020 to 15-Apr-2020
India's Ministry of Health and Family Welfare announced (11-Mar-2020) the government plans to suspend "all existing visas, except diplomatic, official, UN/International Organisations, employment, project visas", effective 13-Mar-2020 to 15-Apr-2020, with the aim of preventing the transmission of coronavirus.
The Ministry stated "all incoming travellers, including Indian nationals, arriving from or having visited China, Italy, Iran, South Korea, France, Spain and Germany" since 15-Feb-2020 will be quarantined for a minimum of 14 days, effective 13-Mar-2020. It added: "Indian nationals are strongly advised to avoid all non-essential travel abroad". [more - original PR]
3. Middle East:
Gulf Air suspends operations to Kuwait until further notice
Gulf Air suspended (12-Mar-2020) all Kuwait operations, effective 13-Mar-2020 until further notice. Remaining services to and from Kuwait are limited to Kuwaiti citizens with non-Kuwaitis denied entry into Kuwait International Airport on services landing on 12-Mar-2020 and 13-Mar-2020. [more - original PR - Arabic/English]
ENAC proposes 'minimum airport infrastructure scenario' closures across Italy due to nationwide quarantine
5. North America:
IATA warns US-Schengen market restrictions 'will create enormous cash-flow pressures for airlines'
6. Latin America:
LATAM cuts international capacity by 30% in response to coronavirus outbreak
LATAM Airlines Group reduced (12-Mar-2020) international operations by approximately 30% due to lower demand and government travel restrictions in reaction the coronavirus pandemic.
The measure will apply principally to services from South America to Europe and the US between 01-Apr-2020 and 30-May-2020. LATAM Airlines Group CCO and CEO-elect Roberto Alvo stated: "Faced with this complex and extraordinarily dynamic scenario, LATAM is taking immediate and responsible measures to safeguard the group's long-term sustainability, while seeking to secure passengers' travel plans and protect the jobs of the group's 43,000 coworkers".
Other measures include the suspension of new investments, expenses and hiring as well as incentives for unpaid leave and to bring forward vacations. LATAM's domestic markets have not yet been affected and the group has decided not to implement changes to national flight itineraries for the time being. [more - original PR]
The above is a selection of more than 150 news updates from today’s CAPA Membership coverage specifically on COVID-19, which also covers traffic data, route and frequency announcements, government advisories and more. For more information about CAPA Membership, please click here.
Additional Analysis (please click on the headings to go to the full story)
On 12-Mar-2020 US President Trump banned entry into the United States by foreign nationals with 14-day prior travel within any of the 26 countries of Europe's Schengen zone (essentially a borderless travel region).
The ban takes effect from midnight (EDT) on 13-Mar-2020. US citizens, legal residents and certain family members will be allowed to enter through 11 approved airports.
The UK and Ireland are the most important trans Atlantic aviation markets not included in the ban. IAG's British Airways and Aer Lingus may possibly benefit from any additional traffic through their hubs in London and Dublin.
Around 25% of the worldwide Airbus A380 fleet is in the process of being grounded as airlines cut their largest widebodies from services dealing with the fall-out of the coronavirus crisis.
Korean Air has become the latest carrier to decide that it will take its 10 A380s out of service until Apr. 25, citing reduced travel demand. Other aircraft have also been grounded.
South Korea has been among the countries hardest hit by the coronavirus outbreak, causing many governments to impose restrictions on travelers from Korea. Korean Air has suspended over 130 flights according to its latest update, with frequency reduced on others.
As the US moves from attempting to contain the COVID-19 coronavirus to the mitigation stage, the country’s airlines are following suit, attempting to fortify their respective war chests by cutting capacity, suspending share buy-backs, cutting capex and, in some cases, bolstering their liquidity.
COVID-19 has now become the black swan event that is testing the long-held belief that the US airline industry is much stronger than it was in previous crises, including the Sep-2001 terror attacks, SARs and the 2008 financial crisis.
Now is the time to lean on solid cash balances and be grateful for manageable leverage, and to that end, some US airlines are better positioned than others.
The threat of picking up coronavirus at stopovers en route to London has delivered Qantas a major endorsement of its Sunrise strategy.
As part of a large scale readjustment of its international flying, the airline will increase its Perth-London non-stop service from once daily to double daily, effective 20-Apr-2020.
For decades Qantas has had to compete with high quality intermediate (“Sixth Freedom”) airlines like Singapore Airlines on all of its westbound and northbound services.
The introduction of its Sunrise flights meant that passengers between Perth and London could dispense with an intermediate stop, at the same time offering Qantas a competitive advantage.
The above is a selection of in-depth insights on the latest developments in the aviation and travel industry related to the COVID-19 outbreak. CAPA Membership includes a range of reports featuring accurate data and independent commentary from our global team of analysts, who offer a unique perspective and actionable insights to help improve decision making. For more information about CAPA Membership, please click here.
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