Singapore Airlines and Hong Kong’s Cathay Pacific Airways will “inevitably” take a longer time to recover from the coronavirus crisis, an aviation consultant told CNBC.
That’s because these carriers are based in markets with no domestic demand for flights, in a time where international travel is still very limited, said Joanna Lu, Asia’s head of consultancy at Cirium.
Airlines have suffered massive losses since air travel was virtually halted when most countries shut their borders earlier this year, in a bid to stem the spread of the coronavirus pandemic.
Both carriers saw profits turn to loss in their latest earnings report card.
Cathay Pacific reported a loss of 9.87 billion Hong Kong dollars (USD 1.27 billion) for the first half of 2020, after registering a profit of 1.35 billion Hong Kong dollars a year ago. For the quarter ended June 30, Singapore Airlines reported a net loss of 1.12 billion Singapore dollars (USD 817.5 million), down from a net profit of 111 million Singapore dollars the previous year.
Lu told CNBC’s “Capital Connection” on Wednesday that travel within a domestic or regional market is likely to resume more quickly, compared to long-haul flights to international destinations.
“Those airlines that are serving a great scale of domestic market would probably gain more benefit from it, including carriers in China, Japan and maybe Indonesia,” she said.
However, the opposite is true for Hong Kong and Singapore, where locals do not travel domestically by air due to the small land area.
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