China gives cash support to encourage airlines and flights
BEIJING/SHANGHAI (Reuters) – China on Wednesday rolled out cash support to both domestic and foreign airlines to encourage them to restore services and stop suspending flights during the coronavirus outbreak.
The move, which had been flagged by the country’s aviation regulator in recent weeks, will alleviate cash flow pressure on China’s aviation industry, one of the worst-affected by the epidemic as nations curbed travel fearing contagion and airlines canceled flights as demand shriveled.
Data from Cirium showed the number of flights to, from and within China canceled or removed from schedules totaled 347,414 from January 24 through February 27.
But some capacity has been added back since, according to flight schedules, with mainland carriers restoring some services as business activity recovers and there are fewer reported coronavirus cases daily in China.
For every available seat kilometer, Beijing will award 0.0176 yuan ($0.0025) for routes that are shared by multiple carriers and 0.0528 yuan for routes that are only operated by one carrier, the Civil Aviation Administration of China said in a statement on its website.
For example, British Airways, which has canceled all its flights to mainland
China, would receive about a 50,000 yuan subsidy for each flight from London to Beijing if it sold all the seats, Reuters calculations showed.
The subsidies, which will be effective for flights between January 23 and June 30, would only apply to routes with mainland destinations or departure points, the CAAC said.
On Wednesday, Finnair said it would cancel all its flights to mainland China until April 30.
Coronavirus disruption could cost African airlines $40 million in revenue this year, a global industry body said on Wednesday, a potentially devastating hit to often struggling airlines counting on lucrative Chinese routes to fund expansion.
Airlines around the world have suspended or modified flights after the outbreak of the COVID-19 coronavirus, which began in mainland China late last year and has now spread to more than 60 countries around the world.
The global hit to the aviation industry is projected to be $29 billion this year – a 4.7% industry-wide drop in revenue per passenger kilometer, the International Air Transport Association has said.