The new coronavirus outbreak could mean a reduction of $4-5b in worldwide airline revenue, the ICAO said Thursday. The UN agency reported that 70 airlines have canceled all international flights in and out of China and 50 others have reduced their operations. Preliminary estimates show this has meant a reduction of nearly 20 million passengers compared to expectations for Q1 2020. That figure equates to potential lost revenue of up to $5b, the agency said. "Prior to the outbreak, airlines had planned to increase capacity by 9% on international routes to/from China for the first quarter of 2020 compared to 2019," ICAO said in a statement. The reality has been a reduction in foreign airline traveller capacity of 80%. Japan looks to be hardest-hit from a reduction in Chinese air travellers in Q1, ICAO said. The country could lose $1.29b in tourism revenue, with Thailand not far behind at a $1.15b loss potential. <br/>
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The novel coronavirus has broadsided the aviation industry, particularly at its epicentre in China. Tens of thousands of flights in and out of the country have been cancelled or removed from schedules completely as airlines cut capacity to try to survive the crisis. Big players like Cathay Pacific, China Southern and Hainan Airlines have put staff on unpaid leave, while embattled Hong Kong Airlines is axing 400 jobs. Those with weak balance sheets are likely to face a cash crunch as dwindling passenger loads may not cover high fixed costs, though state-owned airlines should get some financial support. Story features charts showing how the virus has impacted the industry.<br/>
Two-thirds of China’s passenger planes have been grounded as travel restrictions and fear sparked by the coronavirus outbreak batter passenger numbers and force the country’s airlines to scale back operations dramatically. The total number of passengers carried by Chinese airlines from the end of the lunar new year break on January 27 to February 12 was 10.21m, down 70% compared with the same period a year ago, according to the CAAC. Less than half of all seats were filled on an average flight during the period, according to the CAAC. Across China up to 70% of aircraft are grounded as a result, according to industry analysts. While China’s big three carriers — Air China, China Eastern and China Southern — will be able to weather the storm, smaller and more indebted airlines will be vulnerable should the virus continue to spread, analysts added. “We are in uncharted waters,” said Ivan Su at Morningstar. “The bigger airlines, the Chinese state-backed ones, will get through this, as long as the virus gets contained within the next month or two.” HNA Group, a Chinese conglomerate that owns several airlines, may also be hurt, according to aviation experts.<br/>
The Indonesian government stepped in to support the country’s aviation and tourism industries to limit the damage the coronavirus outbreak has inflicted on airlines. The measures will include cutting landing charges and airport fees for carriers, as well as providing incentives to hotels and tourism businesses in areas popular among Chinese holiday makers, such as Bali, Manado and the Riau Islands, Transport Minister Budi Karya Sumadi said. The ministry is projecting a 30% drop in passenger volume for airlines because of the outbreak. The government has halted all flights to mainland China since the beginning of this month to limit the spread of the virus. “The government will work together with airport operators, airlines and hotels to come up with the incentives,” Sumadi said. “We want to boost the tourism industry and encourage people to take holidays.”<br/>
The owner of New York’s John F. Kennedy International Airport approved the $3.8b expansion of its busiest terminal. Board members of the Port Authority of New York and New Jersey, at a meeting in lower Manhattan on Thursday, voted in favour of a lease amendment allowing the private operator of Terminal 4 to proceed with the modernization and expansion plan. Terminal 4 handled 22m passengers last year, making it one of the busiest entry points into the US. The agreement with the terminal’s operator is the last in a series of deals the Port Authority, a bistate agency, has struck with airlines and private terminal operators at JFK. The deals are part of a planned $13b overhaul of the airport’s roadways, taxiways and terminals, championed by New York Gov. Andrew Cuomo.<br/>
The troubles plaguing Boeing after the yearlong grounding of its 737 Max plane have created an unusual opening for Airbus to swoop in and grab business. There’s just one hitch: Airbus is in no position to benefit. The aerospace giant has such a large backlog of orders to fill that it cannot immediately produce more of its popular narrow-body jets that airlines view as an alternative to the Max. “It might look like a paradox, but in the short term, we don’t benefit from the situation with our competitor,” Airbus’s CE Guillaume Faury said Thursday. Airbus has been unable to take advantage of the shortfall at Boeing partly because it can’t build planes fast enough. Production of Airbus’s A320 jets — the main competitor to the 737 Max and the bulk of Airbus’s commercial business — is months behind schedule because of slowdowns at some of its European factories. As it is, the company’s A320 jets are sold out through 2025, Faury said, making it “difficult if not impossible” to make new planes quickly for airlines that have been left scrambling to find an alternative since Boeing stopped producing the Max. Even so, in the long-running duel between the two rivals for the top spot in commercial aviation, Airbus is riding high. Story has more details.<br/>
Competition is cranking up in the world of turboprops. For years turboprops were an ignored corner of the aircraft industry, accounting for about 120 aircraft a year compared with the more than 1,000 jets made by giants Airbus and Boeing. But growing rivalries in the turboprop business cut through a Singapore Airshow depleted by coronavirus this week. While intercontinental jet travel is vulnerable to trade wars and disruptions such as epidemics, regional development in archipelago nations like Indonesia is favouring the turboprop. The market has been dominated for years by Europe’s ATR, jointly owned by Airbus and Italy’s Leonardo, which enjoys a relatively undisturbed lion’s share of the market with a small slice also held by the Canadian-owned De Havilland Dash 8. But the commercial arm of Brazil’s Embraer is sharpening a pitch to return to the market and CEJohn Slattery said he expected a decision by the end of the year. “We should be positioned in the mid-to-late fourth quarter to bring a business case with a recommendation to our board,” he said.<br/>