A trusted source of Asia-Pacific commercial aviation news and analysis


SEPTEMBER 2020

Main Story

Domestic benefits only for the few

Asia-Pacific airlines expected domestic traffic to be the initial mover in the pandemic’s recovery, but forecasts of an early upturn are proving far from accurate. New COVID-19 outbreaks have applied the brakes on a near return to industry normality, reports associate editor and chief correspondent, Tom Ballantyne.

next article »

« previous article


 

September 1st 2020

Print Friendly

In June, when Qantas Airways group chief executive, Alan Joyce, presented a review of the company’s strategy for managing the impact of the COVID-19 pandemic, he said there were some “green shoots” domestically. Read More » “We are planning to be back to 40% of our pre-crisis domestic flying in July and hopefully more in the months that follow,” he said.

The industry would be living with COVID-19 for some time and Australia’s low infection rate could not be taken for granted, he added.

Never a truer word spoken. A few weeks later, Joyce announced 2,400 employees would be made redundant from the group in addition to the 6,000 jobs lost earlier in the year. The group will outsource its ground handling at 10 Australian airports and merge its domestic and international divisions. The departure of Qantas International boss, Tino La Spino, took effect on September 1.

In August, the Australian state of Victoria, with its affluent corporate profile, was battling to overcome a second COVID-19 wave that had resulted in numerous fatalities. With lockdown in place, Joyce’s 40% target was a pipedream.

The country’s states barred travellers from Victoria. Queensland closed its border with New South Wales. The borders of West Australia, South Australia and Tasmania remain sealed. One of the world’s busiest air routes, between Sydney and Melbourne, shrunk to one or two flights a day.

Australia is not alone in seeing an early domestic-led recovery fall away. Capacity growth in India has stalled as coronavirus cases go through the roof. The Indian government is closely monitoring and controlling the number of flights it is allowing to operate. According to flight data provider, OAG, among the world’s top ten markets, India remains the furthest away from its original capacity levels. Southeast Asia has seen capacity fall by nearly 11% in recent times as some countries responded to spikes in reported Covid-19 cases with extended quarantine and border restrictions.

In Vietnam, a bright spot for domestic capacity, airlines reached near pre-COVID-19 numbers in July, but recorded a 25% capacity decline last month after a virus spike in tourist hotspot, the Da Nang region.

New Zealand, which had been COVID-19 free for weeks and had lifted most restrictions, last month experienced an outbreak of several new cases and reimposed lockdown rules, deterring local travel. The Indonesian government announced it would allow foreigners into Bali from September 11, but reversed its decision as second wave cases continued to climb across the region.

In Japan major airlines were forced to make speedy schedule revisions as the coronavirus resurged. Japan Airlines (JAL) announced the suspension of 5,353 domestic flights that were scheduled to September, which was 31% of the domestic services it had originally planned for the period. “We thought there would be something of a recovery in demand, but the resurgence in infections has made it a tough environment,” said JAL chief financial officer, Hideki Kikuyama, when the carrier announced its earnings. After cutting 25% of its domestic flights in August, All Nippon Airways (ANA) said it would reduce its flights by 10,445, or 45%, on 99 domestic routes to September 22.

Despite the bad news, the Asia-Pacific is outperforming the rest of the world in domestic air travel. Travel data analytics provider, Cirium, said Vietnam, Indonesia and South Korea were the only countries in the world to record growth in domestic air travel in July compared with the same month last year.

China is dominating the number of flights operated and continues to lead the region in domestic traffic growth. The International Air Transport Association (IATA) reported the country’s air traffic declined 35.5% in June - the latest statistics available - compared with the same month a year ago. The numbers improved from a 46.3% drop in May. Anecdotal reports close to press time said Mainland domestic air traffic “was just about normal” as airlines increased capacity to boost the national economy.

In South Korea, authorities reported domestic traffic had returned to around 90% of normal schedules. Malaysia is reporting improved traffic numbers. Malaysia Airports said statistics from its 39 managed airports showed passenger and aircraft movements, mainly domestic, in the first nine days of July doubled from the same period in June.

In August, the airport owner reported passengers carried in July, both domestic and international, surpassed two million for the first time since Malaysia imposed travel restrictions in March.

Malaysia Airports group chief executive, Shukrie Salleh, said: “We are hoping to see larger increases in traffic numbers as we go forward especially with Hari Raya Aidiladha approaching at the end of the month. Malaysians who did not have the option to spend Aidilfitri with their families will surely take the opportunity to travel back to their home towns and enjoy the festivities with their loved ones.”

The airport group was pleased to see local airlines were launching aggressive sales campaigns to increase load factors, he added.

None of this is doing much to make up for the dramatic loss of international traffic for airlines in the region. It continues to stagnate as borders remain closed and quarantine rules generally remain in force.

The unexpected drag on a domestic demand was reported as IATA conceded overall recovery will take longer than expected. Global passenger traffic (revenue passenger kilometres or RPKs) will not return to pre-COVID-19 levels until 2024, a year later than previously projected, it said.

“Domestic traffic improvements notwithstanding, international traffic, which in normal times accounts for close to two-thirds of global air travel, remains virtually non-existent,” said IATA director general and CEO, Alexandre de Juniac.

“Summer [northern hemisphere summer] our industry’s busiest season is passing by rapidly. There is little chance of an upswing in international air travel unless governments move quickly to find alternatives to border closures, confidence destroying stop-start re-openings and demand killing quarantine.”

The airline association is well aware of the threat posed by “second and third waves” of COVID-19 to domestic and international traffic. For several Asia-Pacific airlines the threat is reality. They must overcome air travellers fears that their health will be endangered if they return to flying.

To address these fears, IATA has released an airline self-assessment health checklist to support the International Civil Aviation Organization’s (ICAO) Take-off: Guidance for Air Travel through the COVID-19 Public Health Crisis, a global standard framework of risk-based temporary measures for governments and the air transport value chain for safe operations during the COVID-19 crisis.

But the initiative has had a mixed response from governments despite ICAO’s council president Salvatore Sciacchitano’s plea for a harmonized approach worldwide to “building back better” in dealing with the impact of COVID-19.

Air cargo to the rescue in COVID-19 wracked world
If there is a bright spot at the region’s aviation industry in these pandemic times, it is undoubtedly the air cargo sector. It has continued to operate capacity with freighters and in the belly of passenger aircraft to keep supply chains open and transport medical supplies across the globe.
If and when a COVID-19 vaccine is developed, air freight services will be crucial to distributing it worldwide. The International Air Cargo Association (TIACA) is working with Pharma.Aero, a non-profit organization dedicated to delivering reliable end-to-end air transportation of medical supplies, to develop global guidance for the air cargo industry to enable optimal transportation of the COVID-19 vaccine.
TIACA said in a statement last month the guidance will be developed gradually in four work packages, overseen by a joint working group, to ensure feedback from all stakeholders in the supply chain of air cargo and pharmaceuticals.
“In the past few months, air freight has demonstrated once again its vital role in the global economy and distribution of essential medical supplies. In the months to come, air freight will again make an important contribution to the global public good and in fighting this pandemic by playing a vital role in the COVID-19 vaccine global supply chain.”
The program aims to provide the air freight industry with clarity along the logistics chain including expectations and quality supply chain requirements, cargo capacity, handling and storage and track and trace requirements to transport the vaccine. At the same time, shippers will gain more understanding about the capabilities of the various logistics players.
“COVID-19 vaccine delivery will be one of the biggest logistical challenges in modern history. No one company can own the end-to-end vaccine supply chain,” said TIACA board member and Global Head of Air Freight at Flexport, Neel Jones Shah,
Pharma.Aero chairman, Nathan De Valck, said: “Amongst our members, i.e. life sciences and pharmaceutical shippers, certified airport communities and air cargo operators, we have a track record of project-based collaboration.”
Members of the working group, who will be drawn from TIACA and Pharma.Aero, will liaise with international organizations developing the delivery standards for an anti-COVID-19 vaccine, and White Papers and conduct webinars as it works towards a year-end deadline for the program.
TIACA, based in Miami in the U.S., represents all sectors of the air cargo industry from shippers and forwarders to ground handlers, airports, airlines, manufacturers, IT providers and several related industries. By Tom Ballantyne

 

next article »

« previous article






Response(s).

abdullah ibrahim says:

October 2nd 2020 04:17am


Need a Debt Loan To Pay Off Bills? Take control of your debt today Available Now Business Expansion Loan Offer? Do you need a loan to pay off Bills? Do you need a loan? Do you need Personal Loan? Business Expansion Loan? Business Start-up, Education, Debt Consolidation Loan Hard Money Loans Loan for any thing ? We offer loan at low interest rate of 2% Loan with no credit check, email: abdullahibrahimlender@gmail.com whatspp Number +918929490461 Mr Abdullah Ibrahim

SPEAK YOUR MIND

Your email address will not be published. All fields are required.

* double click image to change