Analysis Reports

Rolls-Royce joins the ATI Boeing Accelerator

ICAO Council president: COVID-19 an opportunity to 'build back commercial aviation greener'

IATA: CO2 offsetting, sustainable fuels & radical technologies key to combatting climate change

AGS Airports introduces sustainable Oxo-Biodegradable security bag

ZeroAvia completes flight of hydrogen powered six seat aircraft

Welcome to the latest edition of CAPA’s Coronavirus and Aviation global COVID-19 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 from around the world.

Top news headlines:

- China's domestic aviation recovery almost complete;

- IATA: sample of airlines shows 81% drop in revenue in 2Q2020, cargo revenue up 29%;

- AirAsia Group records 98% airline revenue decline in 2Q2020 due to reduced capacity.

Following the aviation summaries, this report contains the latest coronavirus data, globally and by country:

- More than 25 million COVID cases recorded globally since the pandemic began.

In order to avoid massive industry furloughs on 01-Oct-20, US airlines and labour groups have been engaged in an intense lobbying effort to expand payroll support, and the likelihood of the country’s Congress actually passing the necessary legislation for more funding is fading fast. 

There are arguments for and against an extension of the support – delaying the inevitable, versus swelling the ranks of US employment numbers, which will further create a drag on the country’s economy. 

But the debate over the pros and cons of additional payroll support is likely to be over soon as inaction by the Congress renders the discussion irrelevant.

And if even if airlines can buy more time with additional payroll support, no one can predict how the industry will look in Mar-2021 when the proposed funding would expire.

Welcome to the latest edition of CAPA’s Coronavirus and Aviation global COVID-19 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 from around the world.

Top news headlines:

- CAPA: The face of aviation will never look quite the same again;

- IATA: 'Significant change' in travellers booking trips closer to departure date;

- US Senators introduce legislation to extend PSP until Mar-2021.

Following the aviation summaries, the report contains the latest coronavirus data, globally and by country:

- Globally the mortality rate is about to reach one million.

Where do we go from here?

In which Johnny Thorsen argues the case for a glass quarter full….

In case you haven’t already done the math – it is now 8 months since China announced the first major shutdown of 20% of the domestic flights and a few international flights back in late January 2020 – and the time has come to accept that we have entered a new phase in the never-ending odyssey known as “the travel industry”.

Travel as we knew it prior to 2020 will not return for an unknown period of time, and rather than keep debating when it might happen I believe the time has come to say “travel has already restarted” and reposition your business according to the new rules rather than hoping you can survive until the old rules potentially return one day.

A recurring theme in CAPA reports recently has been airports that have publicly committed to pressing ahead with infrastructure development irrespective of the present situation. In some cases the reasoning has been that of securing or gaining strategic advantage, in others it has been to do with an environmental agenda.

In the case of Lima Airport Partners – an organisation 80% owned by Fraport – it is neither; merely a statement of the strength of both it and the parent company and of its ability to attract international financial organisations to finance it in the midst of what is a battle for the entire industry to survive and prosper.

There is the intention to build a new greenfield airport close to New Zealand’s ‘tourist capital’ region around Queenstown. The existing airport there is constrained by the local geography as much as anything else.

One of the chief motivators for the proposal, Christchurch Airport, which has bought the land, is that a longer runway would reduce both emissions and noise substantially.

Some commentators argue that rather than merely perpetuating the status quo where airport design and construction is concerned, some radical new thinking is required, based on lower tourist numbers in the future and longer stays (as well as the prospect of reduced tourist numbers and electrically operated drones).

Meanwhile the defenders of the status quo insist that airline passengers will return sooner than expected, and in numbers.

A local debate thus becomes a global one as industry leaders ponder the future.

There would be no prizes for guessing that the biggest international aviation city pair by available seat kilometres (ASKs) is New York to London – because it is not.

A year ago (the week commencing 23-Sep-2019), the list of the world's top 10 international city pairs had a familiar look to it. Almost all of the cities from that list are home to major hub airports and at least one leading global airline. New York-London was then at number one in the ranking, with 38% more ASKs than number two ranked Dubai-London. Both have tumbled from their perch.

The top 10 international city pairs are now distributed more widely, bringing in cities not historically regarded as world-leading aviation hubs, with two leisure routes topping the list.

The biggest now (week commencing 21-Sep-2020) is Moscow-Antalya. It ranked 49th a year ago and has only 35% of the ASKs that New York-London had then. At number two is Paris to the French island of Réunion in the Indian Ocean.

The COVID-19 crisis is not only shrinking the face of aviation. It is also changing its once familiar features.

The COVID-19 pandemic has significantly altered the dynamics of commercial aviation; now there are low cost operators emerging with a certain nimbleness, and seizing on opportunities created by the crisis.

That trend has firmly taken hold in Mexico, where the country’s largest ULCC Volaris is making a push as its rivals shrink. Volaris is not immune from the larger challenges ushered in by the crisis, but the airline is using its pre-crisis strengths to bolster its position further in a key Latin American market. 

But competitive dynamics could change in Mexico once the country’s only full service carrier Aeromexico emerges from Chapter 11 bankruptcy protection. With corporate demand expected to remain depressed for the foreseeable future, Aeromexico will likely bolster its pursuit of leisure customers. 

As the industry waits for guidance from Argentina regarding the planned 1-Oct-2020 restart date for commercial flights, the country’s government has made a questionable decision to levy a tax on international air tickets. The tax comes after the industry has warned that Argentina’s prolonged closure could put the country’s long term connectivity at risk. 

Argentina’s international travel was already depressed due to the country’s troubled economic state and plummeting currency. And now the latest developments could further threaten Argentina’s competitiveness. 

For now, Argentina’s first ultra low cost operator, Flybondi, appears to remain committed to serving the market, despite being grounded for approximately six months.

However, its commitment is resting on an assumption that the country’s government will oversee Argentina’s aviation industry in a fair manner.