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China considers airlines bailout; OYO fights to keep hotels open | Daily Brief

02/19/2020| 12:07:04 AM| ChinaTravelNews

Malaysia looks to locals and non-Chinese visitors in fulfilling tourist-arrivals target; China plans to take over indebted conglomerate HNA Group and sell off its core airline assets.

Key developments: 

* China may take over HNA Group
* IHG expects a $5 million impact in China
* OYO fights to keep hotels in China open
* Malaysia bets on non-Chinese visitors

Worldwide updates: 

Princess Cruises cancels all China trips

>> US leisure travel giant Carnival's Princess Cruises will suspend all mainland Chinese roundtrips this year. The move comes after the Diamond Princess confirmed over 450 infections on the ship docked near Yokohama, Japan. Princess Cruises said it has not yet figured out next year's schedules.

Malaysia bets on non-Chinese visitors

>> Malaysia expects to meet its target of a record 30 million tourists this year by redirecting its marketing efforts to local and other markets as arrivals from coronavirus-hit China fall. Tourists from fellow Southeast Asian countries and India are some of the other big contributors to the visitor tally.

IHG expects a $5 million impact in China

>> InterContinental Hotels Group (IHG) said it expects a USD 5 million fee impact for February in China due to the disruption caused by the coronavirus outbreak, while the company generates full year fee revenue of USD 100 million there. 

The Greater China area represents around 30% of the company's global pipeline, but contributes less than 10% of IHG's operating profit.  

OYO fights to keep hotels in China open

>> OYO CEO Ritesh Agarwal told CNBC that his company is trying to keep as many of its hotels in China open as possible. Like its peers, the Indian budget hotel chain has seen a drop in occupancy. China is one of its biggest markets and OYO works with about 9,000 hotels there

Hong Kong hotels record single-digit occupancy

>> Hong Kong’s hospitality sector faces “a critical period of life or death” in February and March as tourist arrivals crumble during the coronavirus outbreak. 

The Federation of Hong Kong Hotel Owners said occupancy as a percentage now averaged in the single digits. Tourist arrivals slowed to a daily average of 3,000 in the middle of February from 100,000 last month and 200,000 in February last year.

China considers cash, mergers to bail out airlines

>> China is considering measures such as direct cash infusions and mergers to bail out an airline industry crippled by the coronavirus outbreak, according to a Bloomberg report.

One proposal involves allowing some of the nation’s biggest carriers, which are controlled by the state, to absorb smaller ones suffering the most from the collapse of travel.  

>> China plans to take over indebted conglomerate HNA Group and sell off its core airline assets in an effort to contain the economic fallout from the coronavirus outbreak.

The government of Hainan where HNA is based is in talks to take control of HNA and the airline assets could be taken over later by other local companies. 

Foreign pilots in China take unpaid leave

>> Foreign pilots at some Chinese airlines have returned to their home countries and are considering other jobs after being placed on unpaid leave as demand falls because of the coronavirus. Chinese pilots with greater job security said their income has been sharply reduced because most of their pay is based on flying hours.

Major employers of foreign pilots, including China Southern Airlines and HNA Group’s Hainan Airlines, have acted swiftly to cut their losses, according to pilots and industry experts.

Struggling Hong Kong Airlines sacks 170 staff

>> Around 170 employees at Hong Kong Airlines, mostly flight attendants, were fired on Wednesday, a day after the carrier slashed in-flight services to a bare minimum. 

The move is a desperate attempt to cut costs by an airline which was on the brink of collapse at the beginning of the year, and two weeks ago announced it was making 400 staff redundant.

AirAsia falls 2.52% on potential loss amid outbreak

>> Shares in low-cost carrier AirAsia Group fell by as much as 2.52% at mid-morning following a report that flagged a potential core net loss for the aviation group amid the ongoing Covid-19 outbreak.

The CGS-CIMB Research said it was expecting AirAsia to post a core net loss of RM 1.1 billion in the financial year ending Dec 31, 2020, from its previous expectation of a RM 147 million core net profit.

More Asian airlines expand traffic cuts

>> Asiana Airlines, one of South Korea's two major air carriers, has expanded flight suspensions from China's coronavirus outbreak, reducing demand for jet fuel as traffic across Asia-Pacific slows. Asiana has suspended 79% of its flights to and from China, as well as 25% of flights on southeast Asian routes. 

>> Japan Airlines said Tuesday it will reduce its number of flights from Japan to South Korea and Taiwan through late March and cut services further to China due to a drop in passengers amid the COVID-19 outbreak.

Singapore Airlines also said Tuesday it will cut the number of flights operated by the company and its subsidiary airline as the new coronavirus epidemic dampens demand for air travel.

TAGS: HNA | OYO | IHG | coronavirus | Daily Brief
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