COVID-19 Aviation Impact: CAPA Daily Update – 17-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:
- Global airline alliances call on governments and stakeholders to alleviate impact of COVID-19;
- Qantas cuts international capacity by 90%, domestic capacity by 60%;
- Canada suspends air travel from all countries except the US from 18-Mar-2020.
- Global airline alliances are calling on governments and stakeholders to alleviate the impact of COVID-19 on the industry.
- Qantas has reduced international capacity by 90% and domestic capacity by 60%.
- Canada has suspended air travel from all countries except the US from 18-Mar-2020.
- Cathay Pacific Group has seen a 64.4% decrease in passengers and a 9.6% decrease in cargo in February 2020.
- Lufthansa has grounded Austrian Airlines until late Mar-2020 due to travel bans and declining demand.
- LATAM Airlines has reduced capacity by 70%, with a 90% reduction in international and 40% reduction in domestic capacity.
The latest Novel Coronavirus (COVID-19) Global Situation
154 countries now affected
A variety of new countries have reported COVID-19 cases, taking the total to 154. These countries include:
| Benin | Greenland | Guam |
| Liberia | Mayotte | Puerto Rico |
| Somalia | Tanzania | The Bahamas |
Top ten locations for COVID-19, excluding China (17-Mar-2020)
China cumulative cases (17-Mar-2020)
Top ten highest increases in infections by location (17-Mar-2020)
Global cumulative cases excluding China (17-Mar-2020)
Global mortality rate vs. key locations mortality rate (17-Mar-2020)
Air Capacity Update: President Macron - "We are at war"
Overnight, French President Emmanuel Macron urged citizens to stay at home for at least 15 days in a bid to curve increasing cases of COVID-19. The aggressive move by France came as the country faced another large increase of almost 50% new cases, bring the total to 6,650.
The plan is to begin from midday on Tuesday and lasting through at least the end of the month, with people expected to stay home, leaving only for essential activities like food shopping. In an address to the nation on Monday President Macron said: "We are at war. The enemy is invisible and it requires our general mobilisation."
Capacity to the country has already been affected with further reductions expected this week as a result of the quarantine.
France weekly total system seats capacity w/c 16-Mar-2020
Air France CEO Anne Rigail, in an internal memorandum to staff, reported the impact of the coronavirus on 1Q2020 operating result will be "even more significant" than the EUR200 million figure provided in Air France-KLM's guidance in Feb-2020. A reduction in ASKs by 70% to 90% is expected in the coming days.
Air France weekly total system seats capacity w/c 16-Mar-2020 (future trend line will change)
Aviation & Travel Industry updates
1. Global:
WTTC: Global airline alliances call on governments and stakeholders to alleviate impact of COVID-19
2. Asia:
Cathay Pacific Group pax down 64.4%, cargo down 9.6% in Feb-2020
Cathay Pacific Group reported (16-Mar-2020) the following combined traffic highlights for Cathay Pacific and Cathay Dragon for Feb-2020:
- Passengers: 1.0 million, -64.4% year-on-year:
- Passenger load factor: 53.1%, -28.6pp:
- Mainland China: 43%;
- Northeast Asia: 56%;
- Southeast Asia: 49%;
- South Asia, Middle East and Africa: 41%;
- Southwest Pacific: 60%;
- North America: 54%;
- Europe: 54%;
- Passenger traffic (RPKs): -54.1%:
- South West Pacific: -34.3%:
- North America: -49.2%:
- Europe: -52.5%:
- South Asia, Middle East & Africa: -58.1%:
- North East Asia: -58.3%:
- South East Asia: -62.3%:
- Mainland China: -87.3%;
- Cargo: 118,711 tonnes, -9.6%:
- Cargo load factor: 66.6%, +5.8pp. [more - original PR]
Australia / New Zealand: Qantas cuts international capacity by 90%, domestic capacity by 60%
Qantas reported (17-Mar-2020) the following "much larger cuts to domestic and international flying schedules" as a result of significant falls in travel demand due to coronavirus, and new government restrictions across multiple jurisdictions:
- Total Group international capacity to by reduced by 90% until "at least" the end of May-2020, up from 23%;
- Total Group domestic capacity to be reduced by 60% until "at least" the end of May-2020, up from 5%;
- Previously announced cuts in place from end-May through to mid-September remain in place and are likely to be increased, depending on demand;
- Use of some domestic passenger aircraft for freight only services to replace capacity lost from regular scheduled services;
- Fleet of freighters to continue to be utilised. [more - original PR]
3. Middle East:
Inbound services to Doha suspended from 16-Mar-2020
4. Europe:
Lufthansa grounds Austrian until late Mar-2020
5. North America:
Canada suspends air travel from all countries except the US from 18-Mar-2020
Canada's Government announced (16-Mar-2020) the suspension of entry into Canada, via air travel, of foreign nationals from all countries except the US who are not citizens or permanent residents and have resided in any country other than the US in the last 14 days, in order to reduce the spread of coronavirus.
This travel ban is effective from 12:00 on 18-Mar-2020, and will not apply to air crews, travellers arriving in Canada in transit to a third country, permanent residents, diplomats or immediate family members of citizens. Canadians are urged to avoid non essential travel outside Canada, and any traveller entering the country will be required to undergo 14 days of self isolation, with the exception of workers who are essential for the movement of goods and people.
The government will also redirect some international inbound services to one of four airports, effective 00:01 on 18-Mar-2020: Toronto Pearson International Airport, Vancouver International Airport, Montreal Pierre Elliott Trudeau International Airport and YYC Calgary International Airport. The Canada Border Services Agency and Public Health Agency of Canada (PHAC) will ensure an increase in resources at these four airports. Furthermore, the government is requesting airlines undertake the following obligations:
- Effective immediately for implementation at 00:01 on 19-Mar-2020 (these measures do not apply to domestic or cargo services):
- Airlines are to begin denying boarding to travellers who are symptomatic and to keep them from going on an international service to Canada, irrelevant of citizenship status;
- Air operators are to perform basic health assessment of all air travellers before boarding, based on guidance from the PHAC;
- Carriers are to refuse boarding to travellers symptomatic of coronavirus for a period of 14 days and until the traveller is able to demonstrate they are non symptomatic, or until a medical certificate is presented that will confirm the passenger as a non carrier.
If passengers become symptomatic inflight, carriers must isolate the passenger immediately and flight crews must put on personal protective equipment and notify air traffic control. Airports will also be required to segregate any symptomatic passengers immediately upon deplaning. The government is requesting airport operators perform enhanced cleaning and disinfection, and that strengthened screening measures be put in place at airports. [more - original PR] [more - original PR - Prime Minister of Canada]
6. Latin America:
LATAM Airlines sheds international capacity by 90%
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)
Despite the coronavirus being less intense in Latin America, long haul international demand from the region is coming under pressure. The drop-off in demand, coupled with currency pressure, has forced the Brazilian airline Azul to slash its international capacity.
Perhaps fortunately for Azul, the majority of its capacity is deployed into Brazil's domestic market, but the airline is still making adjustments on domestic routes, pledging to match its capacity in line with demand.
As airlines worldwide work to shore up their liquidity and halt nonessential spending, Azul is touting its ability to weather the fallout from the spread of COVID-19 coronavirus, including no significant debt payments that are due in 2020.
COVID-19. By the end of May, most world airlines will be bankrupt
By the end of May-2020, most airlines in the world will be bankrupt.
Coordinated government and industry action is needed - now - if catastrophe is to be avoided.
As the impact of the coronavirus and multiple government travel reactions sweep through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.
Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full.
Forward bookings are far outweighed by cancellations and each time there is a new government recommendation it is to discourage flying. Demand is drying up in ways that are completely unprecedented. Normality is not yet on the horizon.
The US government's decision to initiate a travel ban covering the Schengen Area of Europe is essentially rubbing salt into the wounds the country's airlines are suffering as the COVID-19 coronavirus has reached pandemic status, and that decision significantly raises the levels of uncertainty about when a recovery in demand will occur.
As the country's largest airlines American, Delta and United navigate the effects of the ban, they are also likely being forced to examine their long term view of how they plan to rebound once the pandemic is over.
With US and world markets continuing to get pummelled, those airlines may need to change their judgement that COVID-19 is a "fear event" rather than an "economic event". The public health emergency caused by COVID-19 has now turned into an economic crisis, whose duration is impossible to predict.
Attempts to compare this black swan event to 9/11 or SARS could soon be rendered irrelevant as sports teams suspend their seasons and an increasing number of employees are being required to work from home. The economic reverberations will be deep, and the timing of any recovery is by no means yet within view.
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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