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Canceled flights, empty planes, and eerily quiet airports.
This is what the impact of the coronavirus epidemic looks like through the lens of travelers, and the effect is visible in the skies too.
One year ago, this is how many planes were flying above China, and now, that same airspace looks like this.
The epidemic has led to an 80% drop in traffic at China's busiest airports.
The reduction in global capacity measured by how many seats remain grounded is greater than it was following SARS and even greater than after 9/11.
I think we have a whole different ball game now compared to the 2001, 2003 issues.
So what impact is this having on the aviation industry?
If we look back in 10 years' time, will this be seen as a blip or a game-changer?
The financial implications of suspended flights and routes are huge.
China's become the second biggest aviation market globally with airlines like American Airlines flying as many as 28 flights weekly.
Obviously, now with the coronavirus outbreak, that's dropped down to zero.
To make matters worse, the cancellations and suspensions came directly after Chinese New Year when airlines normally see a boost in ticket sales.
Beyond impacting just Chinese air traffic, you're looking at where do those passengers connect beyond China, where do they go when they're departing China?
A narrow-body aircraft is costing in the order of $10,000 a day, whether that's been financed or whether it's being leased.
If you're not flying it, it's not just the $10,000 per day per aircraft.
You've got crews sitting around, flight crews, cabin crews, yet the aircraft itself will still need maintenance.
A new wide-body aircraft is going to be costing as much as $50,000 a day.
Cathay Pacific and Asiana Airlines have both asked thousands of staff to take unpaid leave.
Hong Kong Airlines announced it would lay of 400 workers.
Its chairman said the changes were about ensuring its very survival, as reported by local media.
Globally, IATA is forecasting a $29.3 billion loss in revenue for 2020.
For context, the Icelanic volcano eruption that disrupted air traffic across Europe for several days cost the industry $1.7 billion in lost revenue.
Though nobody knows how long the epidemic will last, the industry is already bracing for a hit that is expected to be harder than after 9/11 or SARS.
SARS is kind of the benchmark here.
The global share of the Chinese economy was so much lower than it is now, and now, where China's 19% of the global economy, it's a much bigger impact.
With the SARS outbreak in 2003, we saw it took a number of months for the airlines to recover both demand and profits.
What we're really waiting to see now is how long the impact of the coronavirus will be, and that really depends on when we hit peak, for which we really have no estimate at the moment.
Back in 9/11 in 2001, it took about nine months before we saw really the industry recover from the impact of the events.
Now, with the coronavirus, it's a very different situation and it's difficult to give an assessment, but analysts are expecting that with the coronavirus, this could actually last quite a bit longer.
After years of fast growth, the epidemic could cause the global airline industry to contract for the first time since the Financial Crisis according to industry analysts.
Airlines say they're looking into ways to limit the damage, with Chinese companies hoping they will get support from the government like they did after SARS with bailouts, tax breaks, and mergers.
In terms of the types of airlines that could be affected by this, it could really be across the whole spectrum.
It won't just be small airlines or large airlines or airlines with a specific type.
This will be impacting virtually every airline that operates in and out of China.
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Why Coronavirus Is Having a Bigger Impact on Global Airlines Than 9/11 | WSJ

67 Folder Collection
Seraya published on March 9, 2020
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