Latest updates on COVID-19
March 31, 2020
Suppliers pivot to support virus containment
Three stalwart industry suppliers are pivoting their operations to support efforts to contain the COVID-19 virus worldwide.
Kaelis ceo Federico Heitz says: “It is the responsibility of companies to take action in difficult times. With this in mind, we are dedicating our powerful supply-chain management capabilities to the fight against COVID-19 not only for our customers, but also for any company or government institution that might need it globally.
“Currently, there is a worldwide shortage of Personal Protective Equipment (PPE) and some customers that want to protect their staff have reached out asking for help. For this reason we are dedicating our full resources, developed over the last 23 years of managing supply chains globally, to the fight against COVID-19 by offering PPE products.
The company can supply masks, goggles, gloves, sanitizing gels and wipes and other protective gear and invites contacts to reach out at email@example.com
Likewise Malton Inflight is pivoting its activities to try and help. Projects & marketing manager, Alex Oakley, says: “Production is largely getting back to normal in China after a very challenging couple of months with the spread of COVID-19 and an enforced extension to the Chinese New Year holiday period. Factories were closed for a considerable amount of time, which inevitably impacted delivery schedules for companies all over the world.
“Luckily it seems as though the Chinese authorities have now got the virus more or less under control, a situation we can take heart from. Some positivity going forward is that China now has the capability to produce (at exceptional speed), the tools with which other countries will need to fight this virus, products like testing kits, hand sanitizer, alcohol wipes and face masks.
“We have been able to pivot our offering and leverage our extensive sourcing network throughout Asia to gain access to these much needed supplies and get them where they need to be.
“We are now offering these out to all of our clients and have seen a huge surge in interest as companies put measures in place to ensure they are doing their part to help stop the spread. We are also contacting local authorities and government agencies to offer a much more economically viable home-testing kit than what is currently available. We need support on this from bodies like Public Health England to ensure it meets their individual requirements, although it is a testing kit which is already being widely used in China and has certification from TUV Rheinland.
“Situations such as this really do bring out the best and worst in both people and corporations, thankfully we are seeing so much positivity and support from our customers, suppliers, staff and stakeholders in general.
“We are doing our best to help on is by keeping prices low and not engaging in any of the profiteering that we have unfortunately seen in some areas. We urge anyone who needs these critical supplies to contact us immediately to find out how we can help, you can do this by sending an email to firstname.lastname@example.org or by visiting our a class=”industryLink” href=”https://www.maltoninflight.com/categories/hygiene-galley” target=”blank”>webpage.
Johannes Kloess, md Galileo Watermark, adds: “Throughout this difficult time we’re also trying to support all governments, healthcare organisations, NGOs, and anyone who is in need of any PPE equipment, anywhere in the world with our logistics capabilities.”
What are you doing to give those fighting this world crisis #ahelpinghand. Let us know and let’s build a movement positive industry support.
March 30, 2020
Standing in solidarity
As the Coronavirus continues to spread at an alarming level, the Airport Services Association (AS) and the Airline Catering Association (ACA) are working hard to address the devastating economic and social impact of this crisis for the aviation industry.
ACA md Fabio Gamba says: “We stand in solidarity with the hardworking men and women in this industry who continue to be on the frontline of this current pandemic. Just as importantly, we are working behind the scenes to support the recovery of our industry as fast as possible.
Thus far we have posted the basic measures for employees to observe as to avoid putting people’s health and others at risk. We have also issued a press release calling for an international effort to implement a relief package for the air transport industry, including service providers.
We have sent multiple letters to authorities including to the EU-27 and EEA outlining the necessity to immediately allocate tax deferment measures and credit line facilities for service providers. A similar letter was also sent in Brazil and a number of African and Middle Eastern countries on request of members. Additionally, we also reached out with ACI-E to EU-27 and EEA on taking swift measures for laid-off workers and for people still working at and around airports as well as with the social partners to EC, EP and European Council on the need to protect to financially cover employees.
These are just the first steps in protecting our industry and its people. Moving forwards, we will also maintain regular meetings with airports, airlines and ATC providers to find relief measures acceptable to all, that don’t benefit one sector to the detriment of the others. We are also coordinating meetings with lobbying firms in Europe and the US to make sure grants, loans and credit facilities will trickle down to the whole industry, in a fair and equitable way.
Despite all this activity, ACA and ASA still wish they could do more on behalf of the industry. With up to 70% of our workforce being either laid off, on unpaid leave or in a very precarious situation such as drastic reduction of working time, we need to continue to make our voice heard. For today and tomorrow. We must also prepare for the much-hoped for recovery and avoid becoming a cause of protraction of the crisis. This is why we are pushing for fast-track re-employment procedures everywhere as soon as possible.
Much has been done, but there is still much to do to support our community. If you would like to get in touch, ASA and ACA very much welcome your feedback and ideas right now.”
March 24, 2020
APEX/IFSA launch letters campaign for supplier support
The Airline Passenger Experience Association (APEX) is encouraging governments worldwide to issue immediate tax relief for the airline industry in the wake of disruption caused by COVID-19. And in collaboration with IFSA it is encouraging airline vendors and suppliers to reach out to the US government in a bid to secure financial relief too.
Taxation is set to cost airlines estimated $136 billion this year and APEX has put forward three key recommendations: Reduce all possible global tax burdens on airlines during this stressful time; Suspend “hidden taxes” such as forced slot and gate utilisation; Remove any new aviation taxes/penalties from consideration.
So far any financial support appears to be allotted primarily to airlines but the association urges supplier associations and suppliers themselves to run a letter writing campaign highlighting “airline caterers, food suppliers, systems manufacturers and installers, connectivity companies, and content distributors” as just some of the fields that may also require financial support.
A sample letter is available here and the association believes that by everyone taking action we hope we can initiate the support and change that is needed.
Following initial steps taken by the European Commission and the US Department of Transportation’s Federal Aviation Administration (FAA) this week to temporarily alleviate airlines from their airport slot usage obligations, APEX insists that these rules should be fully relaxed through to the end of the summer schedule, effective immediately, as airlines expect to see a long-term impact on bookings.
APEX’s position aligns with IATA’s recent request to suspend global slot rules due to COVID-19. According to IATA, the impact of the coronavirus could result in passenger airlines losing up to $113bn (£87bn) in revenues this year.
LSG Group braced and ready for the COVID-19 challenge
The LSG Group has reported a positive year of growth for 2019 with new contracts, new business locations and new partnerships established, and now providing a solid foundation for coping with the current coronavirus crisis.
“Our annual result, with record sales and earnings growth, is definitely something to be proud of,” says Dr. Kristin Neumann, chief financial officer and labour director of the LSG Group. “The year was not an easy one for our organisation, which had to manage the ongoing sales activities related to our European business, including some expert brands, and compensate for the loss of two major clients the prior year. This has given us the strength for what is coming ahead with the coronavirus, which will surely keep us on our toes and present us with an even greater challenge. We are in a severe crisis, but we are well prepared for it.”
The business closed the 2019 financial year with consolidated revenues of EUR 3.4 billion. Adjusted for currency effects, the result was up 2.3% over the previous year. The Group achieved an adjusted EBIT (earnings before interest and taxes) of EUR 128 million, an increase of 11% over 2018.
In 2020, the LSG Group expects to clearly feel the impact of the global spread of coronavirus. The statement accepts: “Massive entry restrictions and travel warnings, the halting of business travel by many companies and event cancellations have brought air traffic to a partial standstill that is also affecting the catering business. It is not yet possible to predict how strongly these events will be reflected in the company’s future business results.”
Erdmann Rauer, chief executive officer of the LSG Group, adds: “We are aware that we have to be innovative and flexible in a rapidly changing industry. We have to respond precisely to market trends, position ourselves in the premium environment and use innovative technology.”
In 2019 LSG Sky Chefs signed contract extensions with Delta Air Lines, United Airlines and AirBaltic last year and the group successfully took on the management of Japan Airlines’ lounges at its Frankfurt station. Newly-opened Customer Service Centers (CSCs) in Nairobi (Kenya), Phoenix (USA) and Novosibirsk (Russia) helped to further strengthen its network capabilities worldwide.
“When it comes to partnerships and digitalisation, we are one step ahead,” says Erdmann Rauer, in reference to its cooperation with Barilla, the world’s largest pasta producer, and the additional business successes of Retail inMotion.
The onboard retail brand took over the onboard sales of the Cathay Pacific Group in 2019 and was named In-Flight Retailer of the Year at the Frontier Awards. “Of course, we have not come to the end of our development process by any means, adds Rauer. “We want to offer customers and consumers ever new products and applications. They are demanding tailor-made concepts, which we already offer today and will expand in the future.”
Gategroup prioritises safety
Gategroup Holding AG has published its 2019 full-year results showing positive growth, and is working to address the impact of COVID-19 across the inflight industry.
A spokesman said: “We will continue to work in close cooperation with authorities, customers and airports to assess and address the impact of COVID-19 on our industry. Safety is our number one priority. In addition to the stringent health and safety practices currently in place, we have implemented additional measures to protect the health and safety of our employees, customers, passengers and general public. These measures often are above and beyond applicable regulatory requirements.”
The year end results show revenues remained stable at CHF 5.0 billion in 2019 (vs. CHF 4.9 billion in 2018, an increase of +0.5 %). Positive organic growth of +4.1% was partially offset by a decrease from divestments in non-core businesses (-1.1%) and negative currency impacts (-2.6%).
EBITDA (earnings before interest taxes, depreciation, and amortization) reached CHF 440.3 million in 2019 (vs. CHF 343.9 million in 2018, an increase of +28%); EBITDA margin improved by 191 basis points (bps) to 8.9%. Excluding accounting impacts from the adaption of financial reporting standards as per 1 January 2019, EBITDA margin would have increased by 27 bps. Improved cash generation from operations at CHF 295.7 million (vs. CHF 255.7 million in 2018, an increase of +15.6%).
Chairman of the Board, Richard Ong, said: “With the introduction of the successful Gateway 2020 strategy in 2015, gategroup has proven its successful vision of pushing the boundaries of focused growth and commercial innovation. They have done so by driving an exceptional culinary excellence, leveraging data analytics to better understand passenger behaviors and introducing sustainable equipment solutions and best practices in their operations and for their customers.
“Under the guidance of its strong management team, gategroup has steadily become the most diversified and innovative company in the industry. Their planned acquisition of LSG Europe this year is yet another exciting milestone for the company. Having been selected by Lufthansa as their long-term partner provides gategroup the opportunity to further accelerate the transformation of the industry.
“The start to 2020 was extraordinary given COVID-19 (Coronavirus) which impacts the global economy and aviation industry specically. Companies around the world, including gategroup, must and will remain agile in order to support their employees, customers and passengers. We will continue to oer our full support. As shareholders we remain committed to the airline industry and gategroup’s long-term prospects for innovation and ongoing value creation.”
Monty’s Bakehouse moves to secure its supply chain
Monty’s Bakehouse has segregated its teams and implemented extensive supply chain contingency planning to ensure it can go ‘above and beyond’ in its COVID-19 support for airlines.
MD Matt Crane, says: “These are unprecedented times. We have to protect the supply chain, stay close to our clients to support them wherever we can and adapt deliveries to suit. Thankfully our product is inherently robust as it is frozen, has a long life and packaged. I never thought we would say this but Brexit planning has actually helped as we were already securing our supply chain and now have contingency of supply across seven manufacturing units, four different warehouse locations and four different transport companies to ensure reliable delivery.”
At its UK HQ, the company has created two teams in separate buildings so if one team has to self-isolate the other continues, we will move to home working but still bring the teams back in a segregated manner when the time is right.
Crane adds: “All our airline clients are suffering greatly and by implication so are we, but it remains our role to go the extra mile to help protect them and support our industry in any way we can.”
Airline alliances join forces to call for COVID-19 support
Global airline alliances oneworld, SkyTeam and Star Alliance have jointly called on governments and stakeholders to take action to alleviate the unprecedented challenges faced by the global airline industry amid the COVID-19 pandemic.
The three alliances, which represent almost 60 airlines around the world that contribute more than half of global airline capacity, are strongly supporting the request previously made by the International Air Transport Association (IATA) for regulators to suspend slot usage rules for the northern summer 2020 season as the airline industry suffers from extraordinary reductions in passenger demand.
The alliances said that they welcome the moves in recent days by some regulators, such as the European Commission and the US Department of Transportation’s Federal Aviation Administration (FAA). They also request that regulators consider extending the suspensions for the entire operating season.
The impact of COVID-19 on the airline industry is, indeed, significant, with IATA estimating up to $113 billion in revenue losses for global passenger airlines. The impact is expected to have a ripple effect through the value chain that supports the airline industry. The forecasted revenue loss scenario does not include travel restrictions recently imposed by the US and other governments. US restrictions on passengers from the Schengen Area will place pressure on the US-Schengen market, valued at over $20 billion in 2019.
To alleviate the immense pressures faced by airlines in the current operating environment, and in support of IATA’s statement on 12 March, the three alliances urge governments worldwide to prepare for the broad economic effects from actions taken by states to contain the spread of COVID-19, and to evaluate all possible means to assist the airline industry during this unprecedented period.
The alliances also call on other stakeholders to provide support. For example, airport operators are urged to evaluate landing charges and fees to mitigate the financial pressure faced by airlines due to a severe decline in passenger demand.
Star Alliance ceo Jeffrey Goh added: “The unprecedented circumstances triggered by the coronavirus outbreak pose an existential threat not only to the airline industry but more generally to global trade and commerce, and social connectivity. As airlines stretch their limits to manage the crisis, it is equally critical for governments and stakeholders to avoid further burdens and step up with measures, as some have, that will ensure the future of the travel industry.”
This article was originally published by Future Travel Experience
IATA charts the COVID damage
At the start of this month (Mar 5) IATA stated that airline share prices have fallen nearly 25% since the COVID-19 outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003.
To take into account the evolving situation with COVID-19, IATA estimated the potential impact on passenger revenues based on two possible scenarios.
The first scenario focuses on a limited spread, which includes markets with more than 100 confirmed COVID-19 cases (as of 2 March) experiencing a sharp downturn followed by a “V-shaped recovery” profile. The markets accounted for in this scenario and their anticipated fall in passenger numbers, due to COVID-19, as are as follows: China (-23%), Japan (-12%), Singapore (-10%), South Korea (-14%), Italy (-24%), France (-10%), Germany (-10%), and Iran (-16%). Additionally, Asia (excluding China, Japan, Singapore and South Korea) would be expected to see an 11% fall in demand. Europe (excluding Italy, France and Germany) would see a 7% fall in demand and the Middle East (excluding Iran) would see a 7% fall in demand. Globally, this fall in demand translates to an 11% worldwide passenger revenue loss equal to $63 billion.
However, should there be a wider spread, taking into account all markets that currently have 10 or more confirmed COVID-19 cases, the losses in revenues could grow to $113bn, which accounts for 19% of global revenues. Financially, that would be on a scale equivalent to what the industry experienced in the Global Financial Crisis.
While airlines are taking proactive measures to limit the impact of the virus, such as cutting back on capacity and costs, IATA insists that this won’t be enough to offset the revenue impact.
“The turn of events as a result of COVID-19 is almost without precedent,” says Alexandre de Juniac, Director General and CEO, IATA. “In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse.
“It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis.
“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times.”
This article was originally published by Future Travel Experience
Airports call for collaboration
The Airports Council International (ACI) World believes the predicted global economic impact on the airports sector will be “pronounced” with airport passenger traffic for the first quarter of 2020 down at least 12% compared to projections.
Currently, Asia-Pacific is the most impacted region with passenger traffic volumes down 24% as compared to previous forecasts for the first quarter of 2020. Europe and the Middle East are also expected to be significantly impacted by reductions in traffic. North America is expected to see similar declines in the second quarter of 2020 with recent service reductions announced last week in North America and with more expected in the coming weeks.
Prior to the COVID-19 outbreak, global airport revenues for the first quarter of 2020 were forecast to reach close to $39.5 billion. ACI now estimates a loss of revenues of at least $4.3 billion. Most of the losses are expected to occur in the Asia-Pacific region with a difference of $3 billion in projected revenue. This is approximately equal to the total annual revenues of two major European or Asian hubs combined.
Europe is so far the second most-impacted region, while all other regions will see the impact of the loss of passengers as more data becomes available.
While APEX and IATA call for an ease of the “80/20 rule” which forces airlines to keep flying routes even when planes are empty to preserve their slots, ACI World on the other hand says that the suspension of such slot rules can “jeopardise the ability for countries to stay connected with the world which will in turn have knock on effects to economies”.
ACI World is instead proposing a “market-by-market review” on slot allocation. For instance, in markets that are severely impacted, a suspension of the 80/20 rule may be considered for a limited period, in consultation with airport operators, airlines and slot coordinators.
ACI World Director General Angela Gittens explained: “The airport industry recognises that all stakeholders of the aviation ecosystem are heavily impacted by the COVID-19 outbreak, and as such favours a strengthened cooperation between airports, airlines, and regulatory authorities as the industry responds to the outbreak.”
This article was originally published by Future Travel Experience
March 18, 2020
Aviation bodies call for international action on COVID-19
The Airport Services Association (ASA) and the Airline Catering Association (ACA) have issued a joint statement calling on international bodies to take ‘strong measures’ to prevent the breakdown of air transport services due to the COVID-19 outbreak.
They say action is also needed to avoid countries coming to a standstill.
Fabio Gamba, the head of ASA and ACA, said: “The economic effects of the coronavirus disproportionately affect the hundreds of thousands of men and women working in this industry. We need to take a measured, common-sense approach to this issue as many airport services worldwide continue to operate and provide their invaluable service in this time of crisis.”
Whilst welcoming the seat of measures that governments are taking to alleviate the hardships caused by the pandemic, the ASA and ACA said further action must be taken at an international level, not country by country.
Leading regulators and aviation industry associations must urgently implement a strong action plan, including but not limited to the immediate waiving of taxes and charges that currently put an undue burden on aviation, they said.
The industry must be supported to ensure employment in the short-term and the viability of airport and airline services for the future, they added.
The associations said they are ready to discuss which and how these measures should be applied with the responsible authorities.
March 10, 2020
APEX/IFSA reassures Congress on flight safety
APEX/IFSA ceo, Dr Joe Leader, addressed US Congress last week with reassurance that it remains safe to fly despite the COVID-19 outbreak. During a congressional hearing before members of the House Committee on Transportation and Infrastructure, Leader put forward a list of best practices for airlines to follow to both limit risk and reassure passengers.
The nine steps to best practice as advised by APEX are as follows:
1. Clearly Communicate Passenger / Staff Safety Measures
Openly explain to customers the steps that your airline is taking to make certain they are able to travel safely and easily.
2. Consider Broader Waivers for Changes and Cancellations
Work to minimise concern about future travel by considering broader waivers for booking changes and cancellations to provide greater passenger certainty.
3. Enhance Traceability of Customer Contact Details
Review procedures for managing passenger contact details. Governments and agencies may at some point require airlines to contact passengers after a flight in the unlikely event a passenger is later found to be infected with COVID-19.
4. Passengers that Appear Sick Should Not Be Allowed to Board / Take Off without a Doctor’s Approval
Consider alerting passengers that if they are travelling with symptoms, they may be denied boarding. If customers have a visible cough / sneezing / tissue usage, then airlines may wish to require that passengers have a doctor’s note to board their flight. For example, seasonal allergies may be mistaken for something worse without such documentation. The greatest risk remains passenger perception and denied ability to deplane at an international destination. In geographies minimally affected now, consider giving advance notice to passengers that visibly ill passengers traveling after a set date in the future will require a doctor’s note certifying non-contagiousness and their ability to safely travel.
5. Encourage Flight Crew Awareness
Advise passengers that flight crews are encouraged to watch for individuals with clear symptoms that may concern other passengers. Consider a protocol for denying boarding. In geographies worldwide, the Captain of the aircraft has the ability to deny boarding for the safety and security of the aircraft.
6. Have Clear Aircraft Decontamination Procedures in Place
Review and update aircraft decontamination plans as needed and consider sharing them to further assure the public. Demonstrate full readiness for customers and crew. In Asia, airlines have had to quite rapidly launch programs of this nature. In other areas of the world, airlines should consider how to conduct aircraft decontamination at base and outlying stations.
7. Have In-Flight Aircraft Decontamination Procedures in Place
Consider providing crew with disinfectants to use on lavatory handles and demonstrate during safety procedures how to use hand towels to open and close lavatory doors after washing hands as an additional safety precaution. The WHO has pointed to viral loads in fecal matter as equal to those in sneezes. The lavatory is a high-risk point for COVID-19 infected individuals that are not exhibiting any symptoms.
8. Work with Airport / Government Authorities
In affected regions, work with airport and government authorities to establish airports as safe zones by not allowing visibly ill individuals into the airport and past security. Further, work with airport and governmental authorities for security line decontamination procedures. Consider offering passengers hand-sanitizing and washing ability after they have passed through security.
9. Enhance the Ability for Airline / Supplier Staff to Call in Sick
Take any steps needed to enable truthful self-reporting by airline and supplier employees. Consider steps to mitigate the economic impact on employees that miss work while ill. By taking proactive steps to encourage honest reporting by employees, airlines and suppliers reduce risks for their team members and customers.
March 5, 2020
Breaking news: Hamburg events postponed
Reed Exhibitions, the organiser of the Aircraft Interiors Expo (AIX), World Travel Catering & Onboard Services Expo (WTCE) and the Passenger Experience Conference (PEC), has today said both exhibitions and the Passenger Experience Conference will be postponed following the escalation of COVID-19 in Europe. New dates are not yet confirmed.
Speaking about the announcement, Katie Murphy, Portfolio Director at Reed Exhibitions, said: “The health and safety of our exhibitors, visitors and staff is our number one priority. In close coordination with all partners involved, we will promptly announce an alternative date for the events.
“We have been closely monitoring the situation and notices issued by the World Health Organisation (WHO), as well as the German Federal Government and Hamburg local authorities. While it is disappointing to postpone the events, given the ongoing developments related to COVID-19, we believe it is the best course of action for all involved.
“This is not a decision we have taken lightly. We trust that postponing the events will provide the international passenger experience industry the opportunity to achieve their business objectives later in the year and we are working to have confirmed dates as soon as possible. We thank our exhibitors, partners, suppliers and visitors for their support.”
Onboard Hospitality steps up its industry support
In response to Reed Exhibition’s above postponements and the challenges now facing the travel sector, Onboard Hospitality is stepping up its publishing initiatives to help support industry colleagues at this most difficult time.
The print edition of the magazine and the Onboard Hospitality Tech Innovation supplement will go ahead as planned and will be mailed directly to all key buyers and suppliers worldwide.
In addition, in the week that WTCE would have taken place (March 30 – April 3), the editorial team will publish Onboard Hospitality Daily – sharing all the news, launches, product developments and the Onboard Hospitality Awards results, as would have been showcased in Hamburg.
Editor Julie Baxter said: “At a time of uncertainty, the need to keep in contact with friends and colleagues has never been greater. To help keep your connections strong, we will create a virtual ‘show around’ opportunity sharing all the news and developments suppliers have prepared, through the digital space. Do get in touch with any launches you had planned to share on stand.”
The Onboard Hospitality DAILY will include:
• Onboard Hospitality Award winners
• Special announcements
• Product showcases
• Expert insights
February 24, 2020
IATA warns of “very tough year for airlines”
The aviation industry could experience its first decline in passenger demand this year since the global financial crisis of 2008-9, IATA has stated this week as it warns of “a very tough year for airlines”.
Widespread flight cancellations and suspensions enforced by the spread of COVID-19 could see a 4.7% hit to global passenger demand and lost revenue of $29.3 billion in 2020, says IATA.
The International Air Transport Association (IATA) says its initial assessment of the impact of the latest coronavirus outbreak shows a potential 13% full-year loss of passenger demand for carriers in the Asia-Pacific region.
Growth of 4.8% had previously been forecast for 2020, meaning an estimated 8.2% full-year contraction in the region compared to 2019 demand levels.
That would translate into a $27.8 billion revenue loss in 2020 for carriers in the Asia-Pacific region, says IATA, the bulk of which would be felt by carriers registered in China.
Carriers outside of Asia-Pacific are expected to take a $1.5 billion hit, taking total lost revenue to $29.3 billion, representing a 4.7% reduction in demand.
In December, IATA forecast global growth of 4.1% for the industry in 2020, meaning an overall 0.6% global contraction in passenger demand is now forecast for 2020.
IATA says its estimates are based on a scenario where COVID-19 has a similar v-shaped impact on demand that was experienced during the SARS outbreak in 2003.
“These are challenging times for the global air transport industry,” says Alexandre de Juniac, IATA’s Director General and CEO.
“Stopping the spread of the virus is the top priority. Airlines are following the guidance of the World Health Organization and other public health authorities to keep passengers safe, the world connected, and the virus contained.”
De Juniac continues: “The sharp downturn in demand as a result of COVID-19 will have a financial impact on airlines – severe for those particularly exposed to the China market.
“We estimate that global traffic will be reduced by 4.7% by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the Global Financial Crisis of 2008-09.
“This will be a very tough year for airlines.”
February 19, 2020
Latest statement from Reed
Reed, the organiser of WTCE/ AIX, has said that the shows will run as scheduled amid COVID-19 concerns:
“The Passenger Experience Conference, Aircraft Interiors Expo and World Travel Catering and Onboard Services Expo will run as scheduled.
“We are monitoring the Coronavirus situation very closely. We will take appropriate actions in accordance with the notices issued by the World Health Organisation (WHO) – and local German authorities.
“We are in regular contact with the Hamburg Messe and airport to align on all actions regarding the virus. The health and safety of our exhibitors, visitors and staff is our number one priority.”
Read the full statement here.
February 7, 2020
Finnair CEO Topi Manner expects the coronavirus outbreak to have a “relatively limited” impact on the airline’s financials and believes the aviation market will be pretty quick to recover once the situation is under control.
Manner said the reason he expects the impact to be relativity small is that the period after Chinese New Year is typically the slowest of the year and the “weakest in terms of profitability,” reports skift.com
“The way the situation will unfold from here and develop from here remains to be seen. The visibility is low, and then it can swing basically either way. And that is something that we are taking into consideration in our guidance for this year,” Manner told analysts on an earnings call on Friday.
“What is clear, however, is that eventually, this will pass. And if we look at the experiences from SARS and similar viruses in the past. I think that the conclusion is clear at the conclusion is that the situation is of temporary nature. And when the recovery starts, then the recovery will also be relatively fast in terms of global aviation.”
Airlines react to coronavirus outbreak
February 4, 2020
As of January 30 2020, the novel coronavirus virus has spread to 20 countries and has over 8,100 confirmed cases. Sixteen airlines have suspended flights or significantly reduced capacity to and from China and suppliers within the onboard sector are reacting and preparing for the ongoing health emergency.
Amongst those airlines amending their schedules are Virgin Atlantic, Air France, Air New Zealand, American Airlines, British Airways, Cathay Pacific, China Southern Airlines, Delta, Finnair, KLM, Lufthansa Group Airlines, Qantas, Qatar Airways and United Airlines.
Global travel and data analytics firm Cirium reports nearly 10,000 flights have been suspended since the outbreak began.Peter Morris, chief economist at Ascend by Cirium, says: “The industry is playing its part to help prevent the spread of the virus, but the outbreak will inevitably cause significant disruption of schedules and travel patterns in the short and medium term.”
Qantas group CEO Alan Joyce has said he fears airlines with heavy exposure to the China market could face serious financial difficulties and while it is early to make too many predictions “it will be survival of the fittest in this market”.
The somewhat similar SARS outbreak in 2003 cost the global economy around US$40 billion and the Asia Pacific aviation market lost around US$6 billion in revenue. The Chinese market is estimated to have grown eight times since then, with the addition of many more low cost carriers, often operating on thin margins.
The Cathay Pacific Group is among those carriers which have already announced service modifications in the region, for both Cathay Pacific and Cathay Dragon flights to and from mainland China, with immediate effect and until further notice.
On those mainland China flights continuing, the meal service in First and Business Class cabins is being modified to comprise a single tray with appetiser, main course and dessert served together. Trolley services are being suspended and the meal offering in First will be the same as that offered in Business.
Passengers travelling in Premium Economy and Economy on medium to long-duration mainland China flights will be served a disposable snack bag including a hot handheld snack and other items. Amenities including hot towels, pillows, blankets and magazines will also not be offered to passengers in any classes during this period. Inflight duty-free sales will also be temporarily suspended.
Edwin Lim, managing director of airline inflight services, PTE, and a partner at The Hayward Partnership, is based in Asia and has produced an anti-virus containment checklist.
He recommends all frontline staff are briefed on risks, symptoms and preventive measures; protective gear be issued to crew and customers, including facemasks and hand sanitisers; service delivery processes should be modified to limit exposure in the cabin (e.g. single tray service for BC instead of multiple course service); encourage customers to bring personal drink bottles; reduce exposure to contaminated items by removing blankets, pillows, table linen, and rotable catering equipment; and remove cold dishes from meal service. Read the full checklist here.
Impact on production
Federico Heitz, CEO of supplier Kaelis, says his company has decided to move all its current productions from the Wuhan region to other factories further away from the outbreak. “We are in constant communications with our partners outside China so that if the risk continues we are be able to keep the production and the supply chain going so our delivery time does not change drastically. In our headquarters, we have a special team that is currently in contact with the Spanish and European Union Health Agencies as well as the OMS to keep tracking all the information regarding this issue. If airlines have any specific doubt, we encourage them to contact their regional director,” he says.