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CAPA - Centre for Aviation

  • Type: Informa

COVID-19 forces major change across Asia-Pacific airline industry

Airlines in the Asia-Pacific region have two priorities at the moment – short term survival, and figuring out how they need to adjust to the post-COVID-19 industry landscape. The first is obviously the most pressing issue for now, but airlines also cannot lose sight of the longer-term picture.

With many aircraft parked and international traffic in the doldrums, airlines are scrambling to negotiate new financing and are looking to defer as many short term aircraft deliveries as possible. The traffic and demand growth assumptions that have formed the basis of airline plans have been rendered obsolete by the pandemic, forcing them to launch business reviews as they recognise the need to streamline their operations.

Across the Asia-Pacific region, some business models and markets are faring better than others. In many cases, governments are providing a vital lifeline. But despite encouraging signs in specific markets, the real disruption to the airline industry could play out over the next few years.

Summary:

  • Although domestic markets have bounced back, second waves are a major threat.
  • Progress on international travel corridors has been slower than anticipated.
  • SIA and Cathay Pacific have strong support, but border openings are vital.
  • Japanese airlines’ big plans for 2020 have been thwarted by the pandemic.
  • Struggling Southeast Asian flag carriers must re-evaluate their turnaround plans.
  • Independent LCCs face financing challenges, and order books are a headache.
  • In Australasia, some airlines are seizing new opportunities out of the crisis.

View more here: https://centreforaviation.com/analysis/reports/covid-19-forces-major-change-across-asia-pacific-airline-industry-534197