COVID-19: Global cases hit 1.5 million, US represents almost 30%: CAPA update 09-Apr-2020
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.
The report contains a small selection of news briefs and CAPA commentary, on the US system and from each region.
Top news headlines:
- Airbus to cut production rates by about a third in response to ongoing COVID-19 crisis;
- Flair Airlines rehiring 130 employees, maintaining nearly 70% of staff despite major capacity cuts;
Following the aviation summaries, the report contains the latest coronavirus data, globally and by country.
- Global cases hit 1.5 million, US represents almost 30%;
- US records it highest COVID-19 daily increase in cases.
Aviation & Travel Industry coronavirus news updates
Air Capacity Update: Tokyo Haneda Airport currently the busiest airport in the world
The impact of COVID-19 on the global aviation industry has meant capacity has been cut from most routes dramatically changing the ranking of the world's busiest airports. Normally dominated by Atlanta Hartsfield-Jackson International Airport and Beijing Capital International Airport the list at the moment looks somewhat different.
Top 15 airports by system seats: w/c 06-Apr-2020
The above is an example of future planned air capacity, available to CAPA Members from CAPA's country profiles. For more information about CAPA Membership, please click here.Aviation & Travel Industry news updates
1. Global
Airbus to cut production rates by about a third in response to ongoing COVID-19 crisis
Airbus announced (08-Apr-2020) that in response to the ongoing COVID-19 pandemic, it has set new average production rates going forward, as follows:
- A320 lowered to 40 per month;
- A330 lowered to two per month;
- A350 lowered to six per month;
Airbus stated this represents a reduction of the pre-coronavirus average rates of roughly one third. With these new rates, the company "preserves its ability to meet customer demand while protecting its ability to further adapt as the global market evolves". Airbus also announced it is working in coordination with its social partners to "define the most appropriate social measures to adapt to this new and evolving situation". Airbus is also addressing a short term cash containment plan as well as its longer term cost structure. [more - original PR]
2. Asia
Hong Kong: Airport Authority Hong Kong announces additional USD258m relief package for HKIA operators
Airport Authority Hong Kong (AAHK) announced (08-Apr-2020) plans to offer an additional relief package valued at up to HKD2 billion (USD258 million) to operators at Hong Kong International Airport (HKIA) to help "ease their liquidity pressure". The authority will offer to purchase approximately 500,000 tickets in advance from Cathay Pacific, Cathay Dragon, Hong Kong Airlines and HK Express, which "will serve the purpose of injecting liquidity into the airlines upfront, while the tickets will be given away to global visitors and Hong Kong residents in the future market recovery campaign to be launched when the pandemic is over". The Authority will also offer to purchase ground services equipment from ground handling, maintenance, refuelling and catering operators at HKIA, and permit those operators to continue utilising the equipment rent free for a period. AAHK noted it is "also facing a significant shortfall in revenue because of the traffic plummet" at HKIA following the outbreak of coronavirus, so the Authority "will go to the financial market in the next two months to raise the necessary funds, in order to maintain its own liquidity for funding the airport operation and the committed capital projects". The loan will also be used to finance the additional relief package. [more - original PR]
Australasia: Rex and Queensland Government enter agreement for reduced schedule
3. Middle East:
Qatar Airways Cargo handles 50,000 tonnes of medical cargo in one month
Qatar Airways Cargo transported (08-Apr-2020) more than 50,000 tonnes of medical aid and supplies worldwide in the past month. The carrier has expanded cargo operations globally and is operating freighters and cargo only passenger aircraft. The airline added capacity to destinations including Shanghai, Guangzhou, Paris, Amsterdam, Muscat, Kuwait, Delhi, Beijing and Melbourne. [more - original PR]
4. Europe:
Lufthansa Group losing EUR1m in liquidity every hour: CEO
5. North America:
Flair Airlines rehiring 130 employees, maintaining nearly 70% of staff despite major capacity cuts
6. Latin America:
IATA urges Argentina to provide transparent assistance to all carriers
IATA regional VP the Americas Peter Cerda urged the Government of Argentina to provide the aviation industry in the country an assistance in line with that of the governments of Brazil, Colombia and the US (HostelTur, 08-Apr-2020). Mr Cerda warned that the crisis will end at some point, and "for Argentina, it is fundamental to maintain its connectivity for trade, tourism and business". He added that any assistance provided by the Government of Argentina "must be to all, transparent, and thought as an investment in the socio and economic well-being for the country".
7. Africa
Ethiopian Airlines CEO on Hajj 2020: 'I don't think it will happen this year'
The above is a selection of more than 150 news updates today 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)
COVID-19: airport freight bottoms out but some steadying
While there may be very few passengers willing to fly anywhere right now - even if they could - and equally, few airlines there to take them, many eyes will be on developments in the airfreight sector, which struggled badly in 2019 as a result of trade wars and other factors.
Supply lanes must be kept open, and passenger aircraft are being adopted to fulfil that role, even when still configured as passenger aircraft.
Few airports have anything other than a steep cargo volume decline curve during Jan to Apr-2020, although it was at its steepest in different months, depending on the airport's location. The majority of them appear to have 'bottomed out' now, although whether the growth curve will be as positive as the one being presented is anyone's guess.
Freight volume is often taken as a precursor to what will happen in the passenger segment and it languished throughout 2019. Statistics are skewed by the necessity to ship vital supplies across the world but beyond that, figures will be examined closely to see if there will be a freight-led recovery for airlines.
This report covers the top 20 cargo airports worldwide by volume and how that volume is varying according to current global and local circumstances.
In an attempt to force the cancellation of its Airbus orders, easyJet's founder and largest shareholder, Stelios Haji-Ioannou, is urging shareholders to oust directors. His concerns for easyJet are shared by all airlines: cash balance, survival in lockdown and oversupply of aircraft in the recovery.
EasyJet has tapped a UK government loan scheme and taken other steps to bring its total liquidity to GBP2.3 billion by 9-Apr-2020, equivalent to approximately 140 days of 2019 revenue, more than available to most major European airline groups.
In lockdown, with variable costs effectively removed, with additional cost saving measures in place to lower fixed costs, and assuming the deferral of capital expenditure, this cash reserve should be enough to ensure easyJet's survival well beyond the end of 2020.
Nevertheless, Stelios' intervention raises legitimate questions about future fleet needs in the post-virus world, not only for easyJet, but also for all European airlines.
He envisages a sluggish domestic-led recovery, with airlines competing for "a few profitable routes for a few aircraft at a time" and confidence in international travel slow to build. Since only 13% of European airline ASKs were domestic in 2019, this is a challenging outlook.
COVID-19 Aviation recovery: Asian domestic airline capacity regrows
China and other East Asian nations were in the frontline in the fight against coronavirus. It is reasonable to assume they should equally be the first to emerge. As we search for a tipping point in the global battle against COVID-19, these Asian markets may offer cause for optimism - or at least the signs of what the road back might look like.
The most recent schedule filings certainly support that emergence proposition, for domestic airline market regrowth. International expansion will be some time away as many countries remain effectively locked against international visitation.
In some cases it is two steps forward, one step back, as concerns remain about lingering pockets of contamination. But a consistent pattern is emerging of domestic markets that have turned the corner.
The domestic airline markets of China, Korea, Taiwan, Japan, and Indonesia are all clearly demonstrating a belief by their airlines that a corner has been turned, as they re-introduce capacity into the market. While welcome signs, they may not yet all be timely.
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.
Coronavirus Situation Report
Global cases hit 1.5 million, US represents almost 30%
206 countries are now affected
Volume of daily cases diagnosed spikes once again
New cases by day (9-Apr-2020)
Confirmed COVID-19 cases by day, excluding China (9-Apr-2020)
US records it highest COVID-19 daily increase in cases
Top ten locations for COVID-19 (9-Apr-2020)
Top ten highest increases in infections by location (9-Apr-2020)
Global cumulative cases (7-Apr-2020)
Global mortality rate (dark blue line) vs. key locations mortality rate (9-Apr-2020)
Spread of virus is proving difficult to manage
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, while the US continues with the highest trajectory, as it comes late to lock downs - and even now, several states have still not done so.
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)
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