The aviation market in China has now reached the point of being smaller than Portugal’s aviation market, thanks to the Coronavirus. Up to 80% of seats onboard Chinese aircraft, or on flights catered to the Chinese market, have been canceled.
What are the details?
According to a new report from Bloomberg, the Chinese aviation market, which has long since been on track to become the largest aviation market in the world, has stalled. It is estimated to have crashed to below the 25th busiest in the world, just after Portugal.
This is due to coronavirus, which has had a two-fold effect on the local aviation industry. The government of China has suspended many internal flights around the country and many foreign countries have suspended flights to China. Some of these have been government-mandated, but you can understand that many regular passengers have shown that they are willing to put their holiday plans on hold until the virus blows over, thereby reducing demand.
To put this into numbers, that is a fall from third place to 26th. This is equivalent to a drop of 80% of the total capacity – around 1.7 million seats onboard aircraft, over the month period from the 18th of January until now.
More than just China is affected
Several countries close to China have had the bulk of their international air traffic reduced due to these cuts.
In particular, is Taiwan, has found that 90% of its international flights’ seat capacity reduced, Hong Kong with 86%, Vietnam at 85%, Thailand at 76%, Japan and Malaysia at 75% and South Korea at 70%. 58% of Canada’s international flight trade has also been cut which just goes to show how far this crisis has reached (source: OAG Worldwide).
“No event that we remember has had such a devastating effect on capacity as coronavirus,” John Grant, senior analyst at OAG, wrote in a report published by Bloomberg. “In many ways, it highlights the importance of the Chinese market to aviation and the rapid globalization of air services as new markets and travelers emerge.”
The majority of these are due to the national Chinese carriers reducing services. As pointed out in the report, some Chinese carriers are operating less international services than some Central Asian and African airlines. For example, China Southern is only operating 800 more seats than Air Astana from Kazakstan, a significantly smaller airline.
Taiwan, the most affected in the list above, is due to its main three airlines reducing up to 250,000 seats in the last five weeks. Starlux, a new Taiwanese start-up airline has had to delay plans to launch a new service to Cebu until at least next month.
It seems that until the virus is successfully tackled, airlines will continue to suffer the bulk of the financial difficulty. And for an industry that already has razor-thin margins and its own share of problems (like the Boeing 737 grounding), this is troubling indeed
More on this on the AviaDev podcast
Our editor had a great chat with Managing Director at AviaDev Europe, Juraj Toth, for the AviaDev podcast this week, which included discussion around the coronavirus. Also included in this week’s podcast was:
- Air Italy: Why did the Italian carrier suddenly go bankrupt, and why didn’t Qatar come to its rescue?
- Storm Ciara: From groundings to go-arounds and record-breaking flights, storm Ciara (or Sabine as it was in Europe) made for some interesting aviation situations.
- Breeze: Aviation superstar David Neeleman has lifted the veil to give us a glimpse of what we can expect from his new airline startup Breeze. We summarize what we know so far.
Simple Flying is a media partner of AviaDev, and previously worked with them on the AviaDev Europe route development conference. Search the site for AviaDev to find our coverage and insight from the event.
Listen to the podcast below
Going forward, we are delighted to have been invited to support AviaDev’s other route development conference in Madagascar, which focuses on developing networks in the growing aviation marketplace of Africa. AviaDev Africa will take place from May 6th to 8th in Antananarivo, Madagascar, from where Simple Flying will keep readers updated with all the goings-on.
In case you missed it, Simple Flying has launched its own weekly podcast. Get it on iTunes, Spotify, Google Podcasts, SoundCloud or wherever you enjoy your podcasts from.