The global air cargo industry is unlikely to grow this year because of the challenges in the China market due to the coronavirus, a senior executive at Boeing said Wednesday. Boeing had previously forecast air freight would grow by 1% to 2% this year due in part to the US and China forging an interim trade deal, said Randy Tinseth, VP of marketing at Boeing Commercial Airplanes. “That is going to see pressure as well,” he said at the Singapore Airshow, referring to the U.S.-China deal. The deal to end a prolonged trade dispute had been expected to end a drought in sales of Boeing jets to China, a key market. “If we are not seeing goods travel and airplanes fly that is under pressure. I think it is going to be really tough to see the cargo market grow this year.”<br/>
general
Boeing said it will take “several quarters” to return the 737 Max fleet to the skies following a grounding that has left about 700 planes on the tarmac. “We are not going to over-stress the system,” said Randy Tinseth, Boeing’s VP for marketing. The manufacturer will first ensure the 400 planes with customers and the 300 more stored in factories are flying again before ramping up production, Tinseth said. “The process of doing this will take several quarters,” he said. One key element of returning the jet to service is training pilots on simulators. While countries like India have advised Boeing to set up simulators locally, Tinseth said existing equipment should cover all training requirements. <br/>
Chinese airlines are rushing to refinance their fleets as they struggle with the impact of the coronavirus outbreak, according to the head of Avolon, one of the world’s largest aviation leasing companies. “When the airline industry is impacted, it tends to move quickly to preserve cash. That is what we are seeing here. The phones have started ringing. We’ve seen a dramatic step up of airlines reaching out to do sale and lease back transactions,” said Domhnal Slattery, CE of the company. Slattery was speaking on Wednesday after the company posted $718m in net profit for 2019, up marginally from $717m in the previous year and a record for the 10-year old business. Slattery added that the fleets of Chinese and surrounding countries’ airlines are sitting on the ground in China, forward bookings “have dropped off the cliff” and their cash positions have dramatically deteriorated. Avolon had close to $6bn in capital available to deploy. “We can be long and strong with our airline customers in China. We have a cash-preservation mindset,” Slattery added. Meanwhile, the Avolon boss expects some smaller carriers to be tipped over the edge by coronavirus and go bust. “There are some thinly capitalised, over leveraged airlines and a number of them would be at real risk,” he said, adding that bankruptcies from major Chinese carriers is unlikely “because the Chinese government will step in, no doubt”.<br/>
The coronavirus has cost Vietnamese airlines about 10t dong ($430m) so far in lost revenues following travel curbs between Vietnam and China, the government said Wednesday. Vietnam declared a public health emergency over the epidemic on Feb. 1 and banned all flights to and from China. The ban would affect about 400,000 passengers a month, the Civil Aviation Authority of Vietnam said. The number of passengers on all international flights fell 14.1% during the first week of February from a year earlier, it added. Vietnam Airlines, Vietjet Aviation and Jetstar Pacific Airlines conduct commercial flights on 72 routes between Vietnam and China.<br/>
A drop in airline flights from China and Hong Kong due to the coronavirus is increasing demand for private jets as wealthy passengers try to get out, executives say, but travel bans and nervous crew have kept that from translating to more business. UK-based consultancy Ascend by Cirium said the number of flights scheduled to operate to, from and within China had dropped by 34% from Jan. 23 through Feb. 11. Those cuts have left stranded passengers to rely on government-led evacuations. For those who can afford it, there are private jet charters carrying smaller groups and promising less risk of exposure to the virus, executives said. Strict quarantine requirements, travel bans on Chinese citizens and concerns for crew safety have left only a limited pool of private jet operators willing to fly to China compared with the situation during the SARS epidemic in 2003, operators said. “This time the operators and countries have put lots of restrictions on the usage of private jets to the countries affected by this virus,” said Logan Ravishkansar, CE of Singapore-based charter operator MyJet Asia. “Business leaders are scared and confused to go in and out of Asia. Flight crews are afraid to fly as well.”<br/>