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COVID-19: Global cases jump 10% overnight: CAPA update 26-Mar-2020

Analysis

Welcome to the latest edition of CAPA’s daily Coronavirus and Aviation global update. We offer this product to our active CAPA Members, as well as visitors to our website to help our industry navigate through this crisis.

Top news headlines:

- COVID-19 numbers increase by more than 10% overnight;

- WTTC: COVID-19 could cut USD2.1 trillion from travel and tourism sector in 2020;

- Wuhan Tianhe Airport to resume domestic operations on 08-Apr-2020.

COVID-19 numbers increase by more than 10% overnight; the latest Novel Coronavirus Global Situation

184 countries now affected

Guinea-Bissau, Mali and Libya were added to the list of countries reporting COVID-19 cases, taking the total to 184.

Confirmed global COVID-19 cases tops 460,000:
Cases by day (26-Mar-2020)

More than 460,000 cases have been confirmed across the globe, representing an increase of more than 10% in 24 hours.

Confirmed COVID-19 cases by day, excluding China (26-Mar-2020)

Italy is days away from overtaking China:
Top ten locations for COVID-19 (26-Mar-2020)

US once again has more new cases diagnosed than any other country

Top ten highest increases in infections by location (26-Mar-2020)

Global cumulative cases top 460,000 (26-Mar-2020)

US mortality growth rate has slowed as more cases are detected

Global mortality rate (yellow line) vs. key locations mortality rate (26-Mar-2020) 

Spain and Germany are on a worse trajectory than Italy, further measures required to stop spread

The growth rate of the COVID-19 virus has differed greatly between countries depending on the measures in place to combat the spread.

Aggressive containment in countries like Japan and Singapore has slowed the pace of spread of the virus.

The comparison below shows the growth rate per selected country once each has reached 100 cases, so there are different start dates e.g. that threshold was reached first for Japan, so that country was 27 days in.

Daily increase in COVID-19 cases, selected countries : Day 1 = 100 case threshold

Aggressive containment appears to slow the growth rate (daily counting starts once the country reaches 100 cases)

Air Capacity Update: Busiest routes year-on-year comparison

Vietnam now has the busiest route in the world thanks to vast decreases in capacity across multiple markets. 

Routes by airport ranked by seat capacity w/c 23-Mar-2020

Routes by airport ranked by seat capacity w/c 25-Mar-2019

Aviation & Travel Industry news updates

1. Global

WTTC: COVID-19 could cut USD2.1 trillion from travel and tourism sector in 2020

World Travel & Tourism Council (WTTC) estimated (25-Mar-2020) the coronavirus pandemic could reduce the contribution of the travel and tourism sector to GDP by up to USD2.1 trillion in 2020. Key regional figures include:

  • Asia Pacific is expected to be most heavily impacted, with up to 49 million jobs at risk throughout the region, representing a loss of nearly USD800 billion to travel & tourism GDP;
  • In Europe up to 10 million jobs in travel & tourism are at risk, totalling a loss of nearly USD552 billion. Germany is set to be the most affected country in Europe, with almost 1.6 million jobs at risk, followed by Russia with an estimated 1.1 million in potential job losses. Italy and the UK follow as the third most impacted, with both countries projected to lose up to one million jobs in the sector;
  • The Americas, including the US, Canada and Mexico, are expected to lose up to USD570 billion combined, with nearly seven million jobs at risk;
  • The region which has experienced the least damaging impact from the COVID-19 outbreak is the Middle East. However, it still faces job losses of 1.8 million and a GDP loss of up to USD65 billion to the regional economy. [more - original PR]

2. Asia

China: Wuhan Tianhe Airport to resume domestic operations on 08-Apr-2020

Wuhan Tianhe International Airport will reportedly resume domestic services on 08-Apr-2020, excluding services to Beijing (Global Times/Changjiang Daily, 25-Mar-2020).

The airport suspended operations on 23-Jan-2020, following the outbreak of coronavirus in Wuhan. International services will continue to be suspended at the airport.

Australia/New Zealand: New Zealand Government declares state of emergency

New Zealand Government declared (25-Mar-2020) a state of emergency and moved into 'Alert Level 4 – Eliminate'. While in force, the State of National Emergency will allow the Director and local controllers, as needed, to provide for the:

  • Conservation and supply of food, fuel and other essential supplies;
  • Regulate land, water and air traffic;
  • Close roads and public places;
  • Evacuate any premises, including any public place;
  • If necessary, to exclude people or vehicles from any premises or place. [more - original PR]

South Korea: Korean Air cuts executive salaries

Korean Air announced (25-Mar-2020) that all of its executives will forgo part of their salaries in response to the worsening business environment due to the coronavirus pandemic.

Executive VPs and above will have their salaries reduced by 50%, senior VPs by 40% and managing VPs by 30%, effective Apr-2020. [more - original PR]

3. Middle East:

Qatar Airways to maintain portion of fleet for repatriations and other pax opportunities

Qatar Airways chief strategy and transformation officer Thierry Antinori reported more than 90 of the carrier's aircraft are currently grounded as a result of the coronavirus outbreak (La Tribune, 25-Mar-2020).
 
He said the carrier is continuing to operate to destinations with reduced frequencies and smaller aircraft in order to maintain a network to cater for a large number of repatriation operations or for passengers requiring other travel arrangements where permitted.
 
Mr Antinori added that load factors are not at the same level as before the crisis and though they are unbalanced between Doha and Europe, they are still "better than we expected" given the situation.

4. Europe:

Paris Orly Airport, London City Airport temporarily suspend all operations

Groupe ADP announced (25-Mar-2020) all air services to/from Paris Orly Airport will be transferred to Paris Charles de Gaulle Airport from 31-Mar-2020 in response to the coronavirus (La Tribune, 25-Mar-2020).
 
The operator will maintain operations at Paris CDG terminal 2E and certain sections of terminals 2F and 2A. ADP is expecting to only handle 10% to 15% of traffic compared to business as usual until mid May-2020.
 
In addition, London City Airport also announced plans to temporarily suspend all commercial and private operations until the end of Apr-2020 due to the coronavirus outbreak. Staff will continue to be employed by the airport throughout the temporary suspension and future decisions around re opening will be informed by guidance from UK Government. [more - original PR] [more - original PR - II]

5. North America:

US Senate passes USD2.2 trillion emergency relief package; USD61 billion for the aviation industry

The legislation, which the Senate passed late on Wednesday night Washington DC time, 25-Mar-2020, includes a USD61 billion lifeline for U.S. airlines, cargo carriers and contractors; about half of that amount will be in loans and half in cash assistance to support salaries, benefits and other employee costs. Those willing to give an ownership stake are eligible to receive direct cash assistance.
 
The legislation  includes more than USD500 billion overall in "support for the hardest hit industries", with a ban on corporate stock buybacks and "tough new limits" on executive compensation. He stated the government is "interested in the workers and the jobs...the companies", and wants the money to be used "on the companies and the planes or whatever they may be, helping to get over this rough patch".

6. Latin America:

Flybondi suspends operations until 30-Apr-2020

Flybondi CEO Sebastian Pereira, via his personal LinkedIn account, announced (25-Mar-2020) Flybondi is "staying at home" due to the COVID-19.
He added: "It is not easy for an airline to suspend operations", however he decided to suspend domestic and international operations until 30-Apr-2020. [more - original PR - Spanish]

7. Africa

Kenya suspends all international passenger services

Kenya Civil Aviation Authority, via its official Facebook and Twitter accounts, announced (25-Mar-2020) the suspension of all international services to Kenya, effective 26-Mar-2020.
Only cargo services will be allowed to operate to the country, with crews expected to self isolate at designated airport hotels.
 

The above is a selection of more than 150 news updates specifically on COVID-19, from today’s CAPA Membership coverage, 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)

Much is made of the disastrous impact of the current COVID-19 coronavirus pandemic on the airline sector, but airports are suffering too, of course, and those organisations which invest in airports must reappraise their strategies. The remorseless progress of the coronavirus globally is threatening the world’s air transport and tourism industries in 2020 and beyond.

A company does not easily come back from disasters of this order, even if the mechanics and infrastructure of the industry remain in place.

In most countries the majority of airports are still state-owned (central, regional or local government); in others, the private sector runs the show. Those private sector investors entered the business because it was perceived as a safe haven for pension funds, for example, with perhaps relatively low returns but proven longevity.

Now, the airports, like the airlines, will hit severe cash flow problems quickly, if they have not already. While some airport development projects will continue because too much time and energy has already been invested to do otherwise, others will inevitably be delayed and possibly for years, rather than months. That is hardly an enticing prospect to a potential investor.

For some, perhaps many, airport investment is not going to look like the long term cash cow it was up until January of 2020.

COVID-19 and European airlines: zero capacity becomes a reality

Ryanair CEO Michael O'Leary has summarised the priority for his airline, which applies equally to all airlines currently: to preserve cash.

"If we have to operate for three, six, nine, maybe even 12 months, with no flights and no revenues how do we survive?", he said (Financial Times/Reuters, 21-Mar-2020).

The main tool at airlines' disposal for preserving cash is to make drastic cuts to capacity.

Total seat capacity in Europe has dropped by 59.1% year-on-year for the week commencing 23-Mar-2020, according to the latest schedules data from OAG combined with CAPA Fleet Database seat configurations. Domestic capacity has almost halved, reduced by 48.3%, and international capacity has been slashed by 62.9%.

Italy has the biggest percentage cut – reduced by 87.5% year-on-year – while Finland, Spain, Germany, Denmark, Greece and Belgium are also shrinking capacity by more than 70%. Of Europe's top 20 airline groups, 18 are showing cuts, and most of them very substantial.

However, data for some still do not appear to reflect full details of some recent announcements. The rate of reduction is certain to increase. At some point, zero capacity could even become a reality for European aviation.

Bristol Airport (UK): expansion plans halted for a second time

During 2019 the focus was very much on environmental opposition to airport expansion as part of the response to ‘climate change’, and also on the air transport business’ tardiness to react cohesively to spokespeople for the environment. In the space of a few short weeks this year the entire ball game has changed, as dodging the COVID-19 coronavirus has become the priority.

But environmental issues remain important, even while the travel and tourism industries are doing their best to stay in one piece and to avoid the loss of aviation companies – airlines, airports, supporting infrastructure – and of millions of jobs.

In some cases the environmental issues are paramount. One such place is Bristol, UK, where local councillors won’t even let the airport build a new car park while public transport access is inadequate.

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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