Glimmer of hope for brutalised airlines
Capacity edges up as countries ease out of lockdown
Spluttering signs of life are emerging in the airline industry, which has been smashed by coronavirus travel bans and restrictions. In this country, an Air New Zealand boss yesterday reported demand is above its forecast of 2 per cent and is today running at 3.5 per cent. The airline’s chief revenue officer Cam Wallace says while there are just 24 sectors today versus 416 at the same time last year, load factors are running above 80 per cent because of social distancing required in planes.
“Seems like a long time ago that we served more than 1000 passengers a day,” he tweeted.
International airline monitoring firm OAG says scheduled capacity has increased for the first time in nearly 10 weeks.
“Perhaps reassuringly those green shoots of recovery are in more than one market. With some countries beginning to ease lockdown restrictions, a few airlines are cautiously peering out from the carnage and testing market demand with some capacity being added back, in some cases actually, quite a lot of capacity,” the Singapore-based firm said.
This week’s data also includes the first few days of May, a seasonal holiday in some markets, and while still below 30 million seats, (a quarter of the same time last year) represents a 2 per cent recovery on last week’s adjusted volumes.
A number of regions show increases week on week and, in some cases, at least on a percentage basis, some “very significant” levels of growth.
In Western Europe, the planned operations of Wizz Air from a number of bases, and Turkish Airlines restoring domestic services from May 1 are behind the levels of growth. Hungarian low-cost carrier Wizz plans to resume flights out of London Luton and Vienna with new protocols put in place to help ensure the health and safety of passengers and crew.
The airline initially expects to operate 16 routes from Luton, while schedules filed with OAG show that 24 services will resume from Vienna.
The airline says it will implement measures to support physical distancing during boarding and enhanced cleanliness on board. Cabin crew will wear masks and gloves. Sanitising wipes will be distributed to each passenger, Routes Online reports.
Wizz Air founder and chief executive Jozsef Varadi last week said the airline expected to restart operations at a rate of about 30 per cent of the
Seems like a long time ago that we served more than 1000 passengers a day.
Cam Wallace (pictured), Air NZ
originally intended capacity, rising to up to 80 per cent in existing markets within two to three months.
OAG says that in Northeast Asia much of the capacity growth comes from Chinese carriers adding seats back ahead of the Labour Day holiday, which starts on Friday and runs for a five-day period.
Demand remained the key to recovery and OAG noted a recent International Air Transport Association (IATA) survey in which 60 per cent of those polled anticipated a return to travel within one to two months.
Around the world, domestic scheduled capacity still remains the dominant market with an 85 per cent share but that is slightly down on the previous week’s level of 87 per cent.
Slightly faster growth in international capacity within Western Europe and specific country markets such as Hong Kong and South Korea explain the slight increase in share.
In the United States, domestic capacity is down by about 450,000 seats, which is similar to the domestic capacity increase in China.
While there are encouraging signs the overall picture remains bleak.
More than 160 airlines that operated scheduled services in the week of January 20 have no scheduled services planned. These include major carriers Ryanair, Indigo, Emirates, EasyJet and Austrian Airlines, which are awaiting further clarity around the easing of travel restrictions.
A further 91 scheduled airlines are operating at less than 10 per cent of their normal weekly capacity including carriers Iberia, KLM, Qantas, Air NZ and Lufthansa, OAG says.
Some of these airlines have been involved in unscheduled repatriation flights of nationals, often to destinations they’ve never serviced before.
The recovery — when it happens in strength — will come too late for some airlines. Last week Virgin Australia passed into administration and South African Airways, a carrier also in a weak position before Covid-19 hit, is teetering on the brink of failure.
IATA estimates that about 25 million jobs in aviation and its related businesses, including the tourism sector, are at risk. Passenger revenue is expected to be US$314 billion ($519b) below last year and airlines will burn through about US$61b in liquidity in the second quarter of this year as demand drops by 80 per cent or more.
OAG says there has been a noticeable increase in the number of cancellations that airlines are making to their schedules just a few days before departure when demand would normally be at the highest point.
In the US domestic market, 39 per cent of all domestic services have been cancelled, while in Japan domestic flight cancellations are running at 21 per cent for April.
Southwest Airlines, American and China Eastern are the top three spots by capacity. According to OAG data, China’s Shandong Airlines currently fills 10th position, up from 39th in January, reflecting how deeply other major carriers have cut capacity.