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FEBRUARY 2020

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Airlines brace for global fallout as novel coronavirus outbreak forecast to peak in coming weeks

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February 7th 2020

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Hong Kong-based Cathay Pacific Airways plans to cut its flights into China amid a "significant drop in market demand" due to the novel coronavirus outbreak. Read More » All major airlines serving China, including U.S. and European carriers, are reducing or suspending their China routes as the number of diagnosed cases of the virus climbs.

At the time of writing, confirmed cases were 29,258, with 1,341 recovered patients. China reported deaths of 636 to date. Among the deaths was novel coronavirus whistle-blower, Dr Li Wenliang. He alerted Wuhan authorities about the virus but was rebuked by the city’s police.

The virus, which first emerged in the central Chinese city in December, has been declared a global health emergency by the World Health Organisation (WHO). While WHO director-general, Tedros Adhanom Ghebreyesus, has said widespread travel bans were not needed, governments in Australia, Singapore, the U.S. and elsewhere have placed restrictions on foreign nationals who have been to China in the past 14 days entering their country.

Airlines around the world have also scaled back or pulled out completely from flights to and from China. Cathay Pacific, being heavily exposed to China, was among the most impacted by the coronavirus outbreak.

The airline group said in a statement to the Stock Exchange of Hong Kong on February 4 it would be "progressively reducing" about 90 per cent of its Cathay Pacific and Cathay Dragon flights into  China.

Further, there would also be "significant reductions around the rest of the network during the next two months" depending on market conditions and other factors. The 27,000 strong staff at the two airlines is being asked to take three weeks unpaid leave on a rotating basis as the impact of the virus erodes load factor.

"The expectation is the total impact across the Cathay Pacific and Cathay Dragon network will be a reduction of approximately 30 per cent of its capacity," the statement said.

"These reductions are temporary for now and are driven by the commercial and operational realities at the current time, as well as projections in short-term demand."

North American, European, Australasian and Asian carriers have suspended, radically reduced or permanently removed their services into China, until recently the fastest growing air passenger market in the world.

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