Airline Sales And Travel Bans – A Look At Asian Aviation’s Tricky 2020

Asia is the world’s largest and fastest-growing aviation market by a wide margin. However, the spread of COVID-19 in January has put the brakes on years of rapid expansion in the region. From airline mergers to ongoing travel bans, here’s a look back at Asian aviation’s 2020.

Singapore Airlines A380 Parked
Airlines across the continent were forced to park their fleets. Photo: Getty Images

Tough start

While most of the world began feeling the impact of COVID-19 in March, Asia began feeling the effects in January. East Asian countries were the first to begin closing their borders and instituting health measures after the initial outbreak in Wuhan, China. By late March, nearly every Asian country, from the UAE to Japan, had seen traffic fall dramatically.

Asia is particularly home to many hub-and-spoke airlines, most of which were heavily impacted by border closures. Carriers like Singapore Airlines, Emirates, Cathay Pacific, and more were forced to park many aircraft in long-term storage. The sudden demand for parking has left facilities will no space for more planes.

Air China planes parked in Beijing
Asian aviation was the first to be impacted by COVID-19 in January. Photo: Getty Images

Many Asian countries did find success with containing the virus, but this meant that borders continued to remain firmly closed. Apart from essential travel for very few, nearly every Asian country is closed to non-citizens and tourists. There are a few exceptions though, such as Dubai and the Maldives.

Cargo and domestic flights

While international aviation is struggling, Asian carriers have found some bright spots in 2020: domestic and cargo flights. The absence of international flights has meant the price of freight has gone up dramatically, allowing airlines to fill their revenue gaps and even turn a profit!

Cargo revenue has gone up over 100% for some airlines as many convert their passenger planes into cargo ones. Carrying freight has been the difference between survival and bankruptcy for many airlines, with demand for freight increasing this year.

Emirates Boeing 777-300ER
Cargo operations have been critical for airline survival this year. Photo: Vincenzo Pace | JFKJets.com

However, no airline can survive without one critical factor: passengers. While international flights may be on the ground, domestic flights are booming. India has already seen an 80% domestic capacity recovery, while China has crossed the 100% mark. Several other countries such as South Korea and Japan have also been boosted by strong domestic demand.

For other countries, the lack of domestic demand has further hurt finances. Singapore Airlines and Cathay Pacific, both without any domestic market, have seen revenue and passenger numbers plummet this year. For Asia, cargo and domestic flights have been the winning recipe for surviving this crisis.

Indian airlines Getty
India’s domestic market has made a strong recovery this year. Photo: Getty Images

Airline sales

The aviation industry also saw some high profile sales this year. South Korea’s two biggest airlines merged this year, with Korean Air buying its rival Asiana for over $1.6bn. The merger will catapult the airline into the top 15 largest airlines in the world and create stronger competition on international routes.

Korean Air Asiana
Flag carrier Korean Air purchased its full-service rival Asiana this year. Photo: Jun Seita via Flickr

2020 also saw Qantas exit its Vietnamese arm, Jetstar Pacific. The airline will be renamed Pacific Airlines under the sole ownership of Vietnam Airlines. Several other airline sales and shutdowns occurred, including NokScoot and AirAsia Japan, as the industry shrunk with demand.

While 2020 was undoubtedly aviation’s toughest year on record, the arrival of a vaccine does bring hope. 2021 could be demand recovery and borders slowly reopen, as Asian aviation looks to bounce back and continue its growth.

What do you think about the future of aviation in Asia? Will airlines recover in 2021? Let us know your thoughts in the comments!

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