COVID-19 Aviation Impact: CAPA Daily Update – 18-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:
- Airbus to temporarily pause production and assembly work at sites in France and Spain;
- Brussels Airlines follows Austrian with suspension of all commercial ops until mid Apr-2020;
- Wizz Air expects normal operations by Jul-2020, has sufficient liquidity to survive crisis.
The latest Novel Coronavirus (COVID-19) Global Situation
155 countries now affected
Barbados was added to the list of countries reporting COVID-19 cases, taking the total to 155.
Top ten locations for COVID-19, excluding China (18-Mar-2020)
Top ten highest increases in infections by location (18-Mar-2020)
China cumulative cases (18-Mar-2020); slowing rapidly
Global cumulative cases excluding China (18-Mar-2020)
Global mortality rate vs. key locations mortality rate (18-Mar-2020)
NEW: Daily increase in COVID-19 cases, selected countries : Day 1 = 100 case threshold
The growth rate of the COVID-19 virus has differed greatly between countries depending on the measures in places to combat the spread. Aggressive containment practises in countries like Japan and Singapore have slowed the pace of spread of the virus.
The comparison below shows the differing cases growth rate per selected country once it has reached 100 cases.
Aggressive containment appears to slow the growth rate
Air Capacity Update: Singapore's aggressive containment plan clear in capacity graph
Singapore first started making significant cuts to capacity in late January which has directly resulted in the containment of the COVID-19 virus.
Singapore weekly total system seats capacity w/c 16-Mar-2020
Further cuts are expected as the national carrier, Singapore Airlines (SIA), announced yesterday it would reduce capacity by 50% in response to the outbreak. See more below.
Singapore Airlines weekly total system seats capacity w/c 16-Mar-2020 (future trend line will change)
Aviation & Travel Industry updates
1. Global:
Airbus to temporarily pause production and assembly work at sites in France and Spain
2. Asia:
China: Shanghai Pudong International Airport reports pax decline of over 81% in Feb-2020
Shanghai Pudong International Airport reported (18-Mar-2020) the following traffic highlights for Feb-2020:
- Passengers: 1.1 million, -81.5% year-on-year;
- Domestic: 550,200, -81.8%;
- International: 522,000, -79.3%;
- Regional: 59,300, -89.5%;
- Cargo: 181,300 tonnes, -7.7%;
- Domestic: 16,100 tonnes, -1.8%;
- International: 138,500 tonnes, -11.2%;
- Regional: 26,700 tonnes, +10.8%;
- Aircraft movements: 15,292, -61.7%;
- Domestic: 7051, -66.4%;
- International: 6995, -54.2%;
- Regional: 1030, -69.9%. [more - original PR - Chinese]
Singapore: Singapore Airlines cuts capacity by 50%, prepared for 'prolonged period of difficulty'
Australia / New Zealand: Virgin Australia suspends all international operations, reduces domestic capacity by 50%
Virgin Australia Group introduced (18-Mar-2020) the following measures in response to coronavirus:
- Suspension of all international operations from 30-Mar-2020 to 14-Jun-2020;
- Group domestic capacity reduction of 50% until 14-Jun-2020;
- Temporary grounding of the equivalent of 53% of the group fleet;
- Dedicated customer care hub for impacted passengers. [more - original PR]
3. Middle East:
Qatar Airways dismisses 200 Filipino workers as a result of coronavirus outbreak
Qatar Airways dismissed approximately 200 Filipino workers as a result of the outbreak of coronavirus. Philippines Labor Attache to Qatar David Des Dicang stated the majority of workers were assigned to the airline's technical department, such as engineers and maintenance staff (ABS-CBN News, 17-Mar-2020).
The termination goes into effect on 17-Mar-2020.
4. Europe:
Brussels Airlines follows Austrian with suspension of all commercial ops until mid Apr-2020
Wizz Air expects normal operations by Jul-2020, has sufficient liquidity to survive crisis
5. North America:
US Travel Association: Reduced travel demand will inflict USD809bn toll on US economy
US Travel Association projected (17-Mar-2020) the effects of reduced travel demand resulting from the coronavirus will negatively impact the US economy by USD809 billion, resulting in the loss of 4.6 million US jobs related to travel in 2020.
US Travel Association president and CEO Roger Dow stated: "Without aggressive and immediate disaster relief steps, the recovery phase is going to be much longer and more difficult, and the lower rungs of the economic ladder are going to feel the worst of it". Analysis conducted by the association produced the following findings:
- 18 million fewer travellers to visit the US in 2020, compared to 2019, with international visits expected to decline at least 23%;
- US expected to lose USD355 billion in travel spending in 2020, with the effects on the international market likely to produce double the impact of 9/11;
- Estimated losses for just the travel industry are enough to push the US into a recession that would last for at least three quarters, with the lowest point occurring in 2Q2020;
- Nearly double the unemployment rate, due to the loss of 4.6 million travel related jobs.
Mr Dow urged the administration to consider USD150 billion in relief for the travel sector, and advised they establish a travel workforce stabilisation fund and an emergency liquidity facility for travel businesses, as well as bring about the optimisation and modification of SBA loan programmes to support small businesses. [more - original PR]
6. Latin America:
Argentina suspends all domestic long-distance form of transport
7. Africa:
Air Senegal to suspend all service to France, Spain, Morocco, Mauritania and Cape Verde
Air Senegal announced (17-Mar-2020) it will suspend all services to and from France, Spain, Morocco, Mauritania and Cape Verde, following decisions made by the state. Suspended services are as follows:
- Dakar-Paris: From 18-Mar-2020 to 18-Apr-2020;
- Dakar-Barcelona: From 15-Mar-2020 to 18-Apr-2020;
- Dakar-Marseille: From 18-Mar-2020 to 18-Apr-2020;
- Dakar-Casablanca: From 15-Mar-2020 to 31-Mar-2020;
- Dakar-Nouakchott: From 17-Mar-2020;
- Dakar-Praia: From 18-Mar-2020. [more - original PR - English/French]
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)
In a statement to the stock market on 16-Mar-2020 easyJet neatly summarised the current, unprecedented, challenge facing European Airlines:
"European aviation faces a precarious future and there is no guarantee that the European airlines, along with all the benefits it brings for people, the economy and business, will survive what could be a long-term travel freeze and the risks of a slow recovery. Whether it does or not will depend significantly on European airlines maintaining access to liquidity, including that enabled by governments across Europe."
A number of European governments have indicated that they are prepared to support the airline industry in the light of the COVID-19 pandemic and the consequent near total collapse of demand resulting from travel restrictions.
This report presents CAPA's analysis of the liquidity balances of leading European airline groups, with Wizz Air and Ryanair leading and Norwegian trailing.
It also gives a review of recent actions taken to cut capacity and expenditure by those groups. It comes with the caveat that, as with the spread of the virus, the situation is changing rapidly and its content may be quickly superseded.
The coronavirus is a fact of life now. Its ramifications are immense, but it will diminish - and then pass.
While we adjust to this new and changing world, it's important to try to see through the fog to what might be the next phase. These are early days, but by tracking developments from now on, we hopefully can perceive trends that point to a more stable environment.
In the first of a new weekly CAPA Membership series, we look in depth at forward or leading indicators of future demand. The aim is to provide insight into signs of stabilisation through the COVID-19 crisis in aviation/travel markets worldwide.
We begin our series with an outlook for China. The world's second biggest aviation market, China, was first into this crisis, so we ask: are there signs of stabilisation there? And if so, could this provide a guide to other markets that are now in free fall?
This report is prepared with thanks to our partners, CAPA Membership, OAG, ForwardKeys, PredictHQ and Skyscanner.
COVID-19 prompts Azul Airlines to slash international capacity
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.
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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