Domestic Markets For Asia-Pacific Airlines On Track For Recovery Through July, According To Cirium

Friday, 26 June 2020, 6:33 pm

Press Release: Cirium

  • Airlines serving large domestic markets are expected
    to see capacity bounce back to pre COVID-19 levels or even
    achieve growth.
  • Recovery of carriers in Mainland
    China and the Asia-Pacific region is critical to the
    near-term delivery aspirations of aircraft
    manufacturers.

Singapore, June 26,
2020:
Signs of aviation recovery are
emerging—especially in Mainland China and the Asia-Pacific
Region, according to the global travel and data analytics
expert Cirium.
This is following the deepest drop seen in global air
traffic since the start of the COVID-19 pandemic in April
2020.

Speaking on a Cirium-hosted webinar, Post
Coronavirus Recovery for Aviation in China and the
Asia-Pacific Region
on June 23, 2020, Ascend
by Cirium’s Head of Consultancy for Asia, Joanna Lu said,
“The global market reached rock bottom in April 2020, and
the only way now is up.”

“The air travel market in
Mainland China is estimated to be down by 58% compared to
the first four months of last year. However, while the
international market has been hit hard since February, there
are signs of recovery in the domestic market,” said
Lu.

Some Asia-Pacific markets are bouncing back
faster

The Asia-Pacific markets that are most reliant
upon on international traffic and inbound tourism suffered
the most. Hong Kong was the hardest hit, with April traffic
down by over 73% compared with the same period in 2019.
Taiwan (down 58.2%) follows Hong Kong and Singapore (down
48.4%) and Thailand (down 46.4%) at third and
fourth.

Ascend by Cirium’s global schedule data
indicates a potential recovery across most Asia-Pacific
markets through July 2020.

“Mainland China’s
domestic schedule suggests a recovery to marginally positive
year-on-year growth by end July, all and other regions are
showing recovery as travel restrictions begin to ease. Those
with large domestic markets are expected to see capacity
back to pre COVID-19 levels or even growth by July,” said
Lu.

Unlike previous economically-driven downturns,
post-COVID-19 intra-region recovery will likely be driven by
bilateral agreements. For example, Mainland China is
planning to establish “travel bubbles” with South Korea
and Singapore for essential business travel. Other Asian
COVID-19 bubbles now under discussion include Australia and
New Zealand, Japan and Taiwan, Vietnam and
Thailand.

Asia-Pacific
airline recovery also key to aircraft manufacturer
success

The recovery of airlines in Mainland China
and the Asia-Pacific region is also critical to the
near-term delivery aspirations of aircraft manufacturers
(OEMs), according to Ascend by Cirium’s Global Head of
Consultancy, Rob Morris who joined Lu on the
webinar.

“Almost one-third of deliveries expected
through 2023 are scheduled for the region. More than 1,360
deliveries are scheduled for Asia-Pacific operators,
representing 31% of the total, compared to Europe at 29%,
and North America at 22%,” said Morris.

The pace is
picking up. The global parked aircraft fleet, which reached
around 64% in mid-April 2020, is now below 50% as airlines
return aircraft to service.

“We still expect to see
several thousand aircraft remaining parked at the end of
year. But the number will reduce as we see the recovery in
Asia-Pacific, and also in North America and Europe, take
shape.”

“Since March 1, 2020, almost 7,000
passenger jets have been returned to service by airlines
globally, with more than 20% of them in Mainland China,”
said Morris.

In regard to, the delivery projections of
Airbus and Boeing, Morris noted that these are sensitive to
a number of key assumptions. But, the most pessimistic
global scenario is consistent with 3,500 single-aisle
aircraft (1,980 from Airbus and 1,480 from Boeing), along
with 900 twin-aisle aircraft (350 from Airbus and 550 from
Boeing – delivered cumulatively through 2023. Current
Market Values & Lease Rates are already starting to see
negative pressure

Morris commented: “In a disrupted
environment, it is very difficult to build a model that
predicts future traffic growth with any precision. The
demand outlook for 2020, 2021 and beyond is unclear because
the dust hasn’t settled yet. However, a realistic recovery
scenario suggests that the airline fleet in-service will
remain below end 2019 levels until 2022 at the
earliest.”

About Cirium

Cirium
brings together powerful data and analytics to keep the
world moving. Delivering insight, built from decades of
experience in the sector, enabling travel companies,
aircraft manufacturers, airports, airlines and financial
institutions, among others, to make logical and informed
decisions which shape the future of travel, growing revenues
and enhancing customer experiences. Cirium is part of RELX,
a global provider of information-based analytics and
decision tools for professional and business customers. The
shares of RELX PLC, the parent company, are traded on the
London, Amsterdam and New York Stock Exchanges using the
following ticker symbols: London: REL; Amsterdam: REN; New
York: RELX. Find out more at cirium.com.

For further
information, please visit http://www.cirium.com/smarterway
and follow Cirium updates via LinkedIn,
Twitter, and WeChat
(WeChat ID:
CiriumCN).

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