China’s air travel industry continued to rebound in October as pent-up demand during the “golden week” holiday and so-called fly-at-will promotions boosted traffic. The recovery was, however, slower than in previous months as new Covid-19 cases arose. The number of air passengers reached 50.32m in October, bringing it back to 88.3% of the level a year earlier, according to CAAC News, a media outlet run by the Civil Aviation Administration of China. That was an increase from 47.94m passengers in September. Analysts believe many people grabbed the opportunity to travel during the festive period after months of being stuck at home under coronavirus lockdown – a concept dubbed “revenge travel”. “It extended the trend of releasing pent-up travel demand, especially during the golden week holiday, while airlines pushed out a variety of ‘fly at will’ promotion packages,” said Qi Qi, an associate professor at Guangzhou Civil Aviation College. Air travel in mainland China has gradually recovered in recent months, ahead of the rest of the world, after the coronavirus pandemic was largely brought under control domestically. It peaked in the golden week holiday, a period of festivities that follows China’s national Day on October 1. Low air fares for domestic flights, and fly-at-will deals have stimulated demand. Tickets for the most popular routes, such as those between Beijing and Shenzhen, and Beijing and Shanghai, listed by China’s online agencies have been selling at a discount of up to 90%. October’s recovery had slowed down from previous months. The month-on-month growth in the number of air passengers was 0.8 percentage points in October, way down from 13.1 and 8.5 percentage points respectively in September and August.<br/>
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With hopes that their season in hell could be approaching an end, airline stocks are on a tear. Shares in Singapore Airlines jumped the most in 21 years Tuesday while those in Cathay Pacific Airways were up the most since 2008 after Singapore and Hong Kong announced the opening of a travel bubble starting Nov. 22. News of successful trials of a Pfizer and BioNTech coronavirus vaccine pushed the Bloomberg World Airlines Index up 9.7% Monday in anticipation of an ebbing tide of pandemic. The cavalry better come quickly. Right now, much of the industry is running short of rations. With traffic down 73% from a year earlier in September — and international flights running at just 12% of their levels a year ago — the usual path for companies to bring in cash by eking out a margin on their revenue is still blocked. That could remain the case well into next year, given the likely bottlenecks to producing and distributing vaccines in quantities sufficient to reopen international travel. Still, there’s more than one way to provision your army. If you can’t sell plane tickets, you can still try everything else that’s not nailed down. The first thing companies try to sell in a crisis are bits of paper. Airlines have issued $88b in bonds so far in 2020, more than half of the $153b that the industry sold over the previous four decades put together. Throw in the value of loans taken out and airlines’ total debt is up by $124b since the end of February, the data show. It’s a similar picture on the equity side. Story has details.<br/>
The unprecedented number of cancelled orders for Boeing’s 737 Max is driving an increase in jets parked at the company’s airfields that will need to be reconfigured before they are ready for a new buyer. Boeing logged 516 net cancellations for the 737 Max in 2019 and 2020 to the end of October. Rival Airbus registered 1,010 net orders for the A320 jet family during the same period. Among the Maxes parked at sites in Seattle and central Washington is an unknown but growing number of “white tails” — jets painted white because they are not promised to any airline. The pandemic has hit both aerospace manufacturers hard, as their customers reel from the collapse in demand for air travel. But Boeing is also losing orders from airlines and lessors who, still without a Max after 12 months, are cancelling their contracts without penalty. So far in 2020, Airbus A320 has 275 net orders, while Boeing’s 737 Max has 443 net cancellations. Another, stricter accounting measure paints an even worse picture for Boeing. The company has 1,020 net cancellations this year, if the figure counts not just voided contracts but also deals with customers which are so financially weak they may not take delivery. The high number of cancellations is noteworthy, said Canaccord Genuity analyst Ken Herbert. “I’m sure Boeing is pretty much doing anything that the airline would want to do to maintain the order,” he said. “It’s not as if Airbus is facing a similar situation with the A320. This is a Boeing-specific, versus a broader industry, phenomenon.” The US FAA next week is expected to lift the flight ban on the Max that has lasted 18 months. Story has more background.<br/>