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Asian, Oceanian Airlines Face COVID-19 Effect

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Asian, Oceanian Airlines Face COVID-19 Effect

Asian, Oceanian Airlines Face COVID-19 Effect
March 12
16:57 2020

MIAMI- Flight cancelations to Asian and Oceanian destinations have continued to roll out, as the coronavirus takes its toll on airlines’ fleet and crew operations.

According to the last International Air Transport Association (IATA) forecast, the revenues for Asia-Pacific airlines will be affected with a down of US$28bn due to the 13% loss of RPKs in 2020.

Asia’s airlines


IATA expected a 2020 scenario of passengers and revenues losses for China at 23% with US$22.2bn, South Korea at 14% with US$2.8bn, Japan at 12% with US$5.3bn, and Singapore at 10% with US$1.3bn.

In February, Chinese airlines’ passenger capacity went down 84.5% for a loss of 21bn yuan (approx. US$300m), according to the Civil Aviation Administration of China (CAAC).

Aeroflot (SU) has canceled some flights to Europe, affecting several routes to France, Germany, Italy, and Spain to respond to the virus spread.

By now, the Russian airline is the only one available to fly in the country and expects to launch a new nonstop flight to Singapore in October of the current year, if the situation allows it.

AirAsia (AK) will cut 10% salary for its workers and executives since March as a consequence of the low passenger demand, suspending routes that have a negative impact on the Malaysian carrier’s costs.

To increase the purchases of tickets, the airline launched a series of seat discounts as a strategy within the AirAsia’s network to boost the traffic of passengers in ten Asia-Pacific countries.

Cathay Pacific (CX) offered unpaid leave to its employees, grounded aircraft, and delayed orders delivery due to the forecasted capacity fall of 65% in March and April.

China Southern (CZ) in turn recently resumed 2,100 domestic flights regarding the COVID-19 spread while still being the most affected company alongside Air China (CA) and China Eastern (MU).

In February, CZ dropped 4.6%, CA went down 2.9% and MU low 5.4% in passenger traffic, according to the Stock Exchange of Hong Kong (HKEX).

Korean Air (KE) informed its workers in an internal memo that it will cut more than 80% of its international capacity. Previously, the carrier cut 44 routes and grounded 100 of 145 passenger aircraft’s fleet.

Singapore Airlines (SQ) has just canceled 15 flights to New Zealand because of low demand, following the suspensions to UK and Italy set to be effective in mid-March through May.

Oceania’s airlines


IATA also expected a 2020 impact loss of passengers by 11% and of revenues about 15.4% for the Asia-Pacific market, excluding China, Japan, Singapore, and South Korea.

Air New Zealand (NZ) has just withdrawn its full-year 2020 earnings guidance as it had to reduce its capacity by 4% in domestic, 11% in long haul international, and 7% in short-haul international.

Finally, Qantas Airways (QF) reduced its international scheduled flights by 23% for six months and its CEO quit 2020 salary about AU$23m (US$15.5m) to diminish the financial virus impact while its employees must take a salary reduction of 30%.

The COVID-19 fallout is being felt on a worldwide scale, as airlines and governments continue to try to ride the crisis out as solemnly as they can.

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A Global Review of Commercial Flight since 1994: the leading Commercial Aviation publication in North America and 35 nations worldwide. Based in Miami, Florida.

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