Home > > China offers airlines subsidies; Finnair considers layoffs | Daily Brief

China offers airlines subsidies; Finnair considers layoffs | Daily Brief

03/05/2020| 10:15:56 PM| ChinaTravelNews

The head of the US Chamber of Commerce said the government will not need to bail out US airlines; Bookings from China to Canadian province declined 70% between March and October.

IATA: Covid-19 hits January passenger demand

>> Global passenger traffic data for January showed that demand climbed 2.4% compared to January 2019 in terms of total revenue passenger kilometers or RPKs. This was down from 4.6% growth for the prior month and is the lowest monthly increase since April 2010. 

Chinese airlines’ domestic traffic fell 6.8% in January, reflecting the impact of flight cancellations and travel restrictions related to covid-19. China’s Ministry of Transport reported an 80% annual fall in volumes in late January and early February. Capacity slipped 0.2% and passenger load factor plunged 5.4 percentage points to 76.7%.

China vows to offer airlines subsidies

>> China has announced it will offer subsidiaries to airlines if they start flying to China again. With the outbreak of the coronavirus, many airlines around the world have curbed or canceled flights to mainland China for fear of spreading the disease.

China has said it will pay RMB 0.0176 yuan (USD 0.0025) per seat per kilometer for any airline which reopens routes that are shared by multiple carriers. This number jumps up to RMB 0.0528 (USD 0.0076) for any carrier willing to open a route which they alone operate.

Business group says no US airline bailouts needed 

>> The head of the US Chamber of Commerce said the government will not need to bail out US airlines in the wake of sagging travel demand due to concerns over the coronavirus. 

Hours later United Airlines said it would slash 20% of international flights and 10% of US flights in April as it launched a hiring freeze, voluntary unpaid leaves and delayed salary increases for executives. It plans similar flight cuts for May.

Flybe is first airline to die amid coronavirus 

>> Flybe, a fledgling UK regional airline, became the first airline casualty of a worldwide coronavirus panic. The carrier was expected to go into administration as soon as early Thursday morning, the Financial Times reported. 

Flybe was in considerable trouble even before the first coronavirus cases hit Europe, drastically decreasing demand for air travel.

Lufthansa to ground 150 planes

>> German airline giant Lufthansa said it would ground 150 of its more than 750 planes worldwide. The group has suspended routes to other virus hotspots, including China and Iran, to late April.

The International Civil Aviation Organization has said that the virus outbreak could mean a USD 4-5 billion drop in worldwide airline revenue.

Finnair considering layoffs to deal with downturn

>> Finnair is canceling flights to mainland China, South Korea and Milan because of the coronavirus outbreak and will open talks with unions next week about temporary staff layoffs, the airline said on Wednesday.

The carrier warned on Feb 28 of a significant fall in profit this year due to the coronavirus outbreak.

GetYourGuide reports on tours reservation falloff

>> GetYourGuide, online travel agency for sightseeing and experiences, has released some numbers about coronavirus's impact. 25% of visitors who previously booked Italy travel activities have canceled within the past week. That’s five times the normal cancellation rate. 

Americans are looking inward. Data showed US interest in North American travel activities is 14% higher than expected last week. Meanwhile, US interest in European destinations is 40% below forecasts, while interest in Asian destinations is down more than 50%.

Coronavirus causes drop in airport retail sales

>> Airport retailers are the latest sector to be hit by the coronavirus outbreak. Amid a decline in travel, foot traffic at airports has dropped off, leading to a slump in sales at major airports.

At John F. Kennedy airport’s Terminal 1, from where China Eastern Airlines, Air China, Korean Air and Japan Airlines fly out, sales at retailers reportedly have dropped by as much as 50%. At Los Angeles International Airport Francisco, foot traffic dropped 20% in February. At some of Asia's major airports, retail has dropped as much as 70%.

Bookings from China to Canadian province drop 70% 

>> Canada’s tourism industry is bracing for the impact of the coronavirus on the number of foreign visitors this summer travel season. Bookings from China to British Columbia are down by about 70% between March and October, according Destination BC. 

Canadian tourism marketing agencies have pulled all their ad money from China and are using it to double down on efforts to attract people from other markets like the United States and United Kingdom.

TAGS: airlines | IATA | subsidies | Daily Brief
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