New Flight Plans: The World and Its Airlines Are Now in Survival Mode Following COVID-19
The novel coronavirus has upturned travel throughout the whole world. In the span of a few months, countries have shut down movement, enforced nationwide quarantines and closed their borders in an effort to stem the seemingly inexorable path of the contagion.
Travel bans were enforced quickly as the dust settled and governments accepted the reality that COVID-19 would not pass as quickly as many hoped it would.
The speed of responses to the crisis has varied across countries. United Nations Sustainable Development Solutions Network director Jeffrey D. Sachs notes that Asia was “far better prepared for a new disease outbreak”, with the 2003 SARS outbreak being a wake-up call reinforced by frequent waves of dengue fever in several East Asian countries.
This is how airlines across Asia are scrambling to adjust to the new reality set in the past few months:
16 March 2020 saw Malaysia impose its Movement Control Order, a cordon sanitaire that imposed travel and other restrictions to curtail the spread of the pandemic. Two of its states in Borneo – Sabah and Sarawak – took drastic measures, imposing restrictions even on other Malaysians from the peninsula.
This move echoes one made by countries all over the world. Flights, recognised as a primary route of transmission for the virus, have dropped dramatically, and airlines are now in shutdown mode.
According to Raymond Yap, an analyst at CIMB Group Holdings Bhd, AirAsia may be burning about RM527 million ringgit (US$122 million) in cash per month in fixed operating costs, financing costs, and fuel hedging losses, following the shutdown of 96 percent of its 255-strong fleet in what the group has termed “temporary hibernation”.
Yap said in a recent report that he estimated the carrier has enough cash to pay its fixed costs for less than five months. “AirAsia will have to tap into new debt facilities and defer payments to its suppliers,” he wrote in an April 6 report. “Although AirAsia is not government-owned, we believe that the Malaysian government will not allow AirAsia to fail, as it will hurt Malaysia’s economy.”
1/8 As #HongKong’s home carrier, we provide important passenger and cargo connections to and from our #HK hub. In light of #COVID_19, and governments' travel restrictions, we will reduce capacity by 96% across our passenger network in April and May. pic.twitter.com/49tKBlebfF
— Cathay Pacific (@cathaypacific) March 20, 2020
Hong Kong’s Cathay Pacific Group announced they would reduce passenger capacity by 96% in April and May across its network “in light of the severe drop in demand”. The regional airline said it would operate a “bare skeleton passenger flight schedule” in the coming months, though its freighter capacity remained intact.
“Our ability to maintain even this skeleton schedule will depend on whether more travel restrictions are imposed by governments around the world, which will further dampen passenger demand,” said the airline in a press release.
Philippines Airlines, another major Asian carrier, extended its cancellation of all its international and domestic flights from April 14 to April 30 due to the extension of the Philippine government’s Enhanced Community Quarantine Period.
“We plan to resume our operations by May 1 if the situation allows. However, we caution you that these plans are highly subject to change, depending on COVID-19 conditions,” the airline said in a recent statement.
The airline said in the same statement, however, that it was mounting two “special flights” for Filipinos/Philippine passport holders in Australia to return home, departing from Melbourne and Sydney on April 19. It is doing the same for Filipinos in other countries as well.
FLIGHT ADVISORY: We confirm that all Philippine Airlines domestic and international flights are cancelled up to April…
Posted by Philippine Airlines on Tuesday, 7 April 2020
Singapore Airlines Ltd., whose budget unit Scoot competes directly with AirAsia, said last month that it would raise about S$8.8 billion (US$6.2 billion) by selling new shares and convertible bonds, a plan backed by Singapore’s sovereign wealth fund Temasek Holdings Pte, the carrier’s biggest shareholder.
South Korea is considering an emergency loan programme worth 300 billion won (US$246 million) and deferrals of airport fees for its virus-slammed discount carriers. Flag carrier Korean Air has suspended or reduced most of its flights in and out of Incheon, and said in a recent tweet that the “cabin of flights departing to the US and those arriving from China gets disinfected with MD-125”, a disinfectant said to act against 142 bacteria and viruses, including salmonella, avian flu, HIV and measles.
Due to COVID-19, temperature checks of all international flights will be conducted at ICN International Airport. Also, the cabin of flights departing to the US and those arriving from China gets disinfected with MD-125. Korean Air will continue to prevent the spread of COVID-19. pic.twitter.com/ILbork78UC
— Korean Air (@KoreanAir_KE) March 6, 2020
These are just some of the responses made so far during this uncertain time. At the end of it all, one thing seems clear: travel is no longer a priority; survival is.