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Sunday, Oct 25, 2020

Bump and lurch as epidemic jolts Chinese carriers

Coronavirus crisis may sink all major Chinese airlines into red for 2020, with ailing HK carriers facing more woes

Planes are becoming hard to spot along major air routes across China as the still-spreading coronavirus takes its toll on the nation’s aviation sector.

According to aviation data cruncher AirWeFly, on February 2 alone, Guangzhou-based China Southern, Asia’s largest carrier by fleet size, cancelled 64% of its domestic flights and halved the number of its international services, while flag carrier Air China grounded half of its planes for domestic routes and almost a quarter for international ones, at a time when the pandemic was snarling air traffic during the otherwise bumper period of travel in the Lunar New Year break.

Demand for travel had already been crimped in the onset of the epidemic since early January, and the drop in flyers culminated in the nationwide cancellation of flights to and out of Wuhan in the wee hours of January 23, when authorities there started to barricade roads and shut runways to stop infected people from fleeing in a bid to contain the spillover of the city’s worsening contagion.

Airlines scrambled to change schedules and grant leave to crews while their booking and customer service offices were inundated with complaints and refund requests.

Furthermore, carriers were mandated by the Civil Aviation Authority last week to waive refund fees and rebooking charges and further slash flights across the nation until further notice, part of Beijing’s moratorium on travel as the entire nation went into a de facto lockdown to discourage trips and gatherings as the coronavirus crisis continued to spiral out of control.

Terminals and runways have soon fallen quiet at major airports in Beijing, Shanghai and Guangzhou that used to be among the world’s busiest hubs, where the usual crowds are gone.

In Wuhan, the ground zero of the outbreak, an airport that is a key mid-way node serving long-haul routes has not seen any outbound flights after Jan 24, other than the cargo jets and airlifters of the Chinese military hauling medical supplies to aid the virus-stricken city.

Chinese papers report that airlines may rack up over 10 million yuan (US$1.43 million) in net losses per day on average when they fly half-empty planes or ground their jets. They have to dig deep into their savings for aircraft leasing and maintenance expenses and are told not to dock employees’ pay when their pilots and ground support staff are mobilized in the all-out effort to ferry doctors and masks to Wuhan.

But other reports say some pilots and flight attendants have been asked to take no-pay leave and some of them may even face the axe when Chinese airlines fly into the worst crisis since SARS in 2003.

Guosheng Securities has warned of a 50% dip in passenger flow for the rest of the first quarter, in its best scenario forecast that the spread of the deadly pathogen can show signs of abating in February and be fully stopped by April.

Prof. Zou Jianjun, with the China Civil Aviation Management Institute, told China Civil Aviation News that most of the carriers may sink into the red in 2020 with the size of their losses depending on how fast their business can turn around before summer, the brisk period for travel.

Airlines are also bracing for travel bans as a growing number of countries from America to Australia and Italy to Indonesia slap entry restrictions or close airspaces to planes originating from mainland China, after the World Health Organization declared the epidemic a global health incident.

Meanwhile, Cathay Pacific and its subsidiaries Cathay Dragon and HK Express, along with Hong Kong Airlines, have cut their mainland capacity by half since Feb 1, after the city’s government unveiled fresh measures to stem the inflow of mainland Chinese.

These airlines, still reeling from the turbulence of the city’s months of unrest that has scared away millions of visitors, fear that their floundering business may hit another rough patch when they cancel northbound fights.

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