Asia-Pacific Airline Revenues Predicted To Fall Off Cliff

February 26, 2020

Singapore Airlines braces for impact

With the COVID-19 outbreak taking its toll on the group’s network to China, Singapore Airline is bracing for the financial impact in its fiscal 2019/2020 last quarter.


The airline has also set up a “high-level task force” to monitor the situation and protect staff and passengers. To diversify revenue, SIA is focusing on its Indian JV Vistara and its KrisShop online retail platform.

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Qantas expects COVID-19 to dent profits, not fleet plans

Qantas expects to take a major financial hit from capacity reductions related to the COVID-19 outbreak, although the airline remains on track to make some significant aircraft order moves this year.


The carrier expects COVID-19 will reduce earnings by A$100-150 million ($66-99 million) in the six months through June 30 as it cuts capacity in some key markets.

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Cathay makes deeper cuts

Cathay Pacific has once again increased its planned capacity cuts as the carrier responds to a precipitous decline in traffic due to the COVID-19 outbreak.


In its latest update, Cathay said its systemwide capacity for February and March will be down 40% year-on-year, an increase from the 30% cuts it had previously announced. The airline signaled that capacity reductions are likely to continue in April.

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Air New Zealand predicts profit hit

Air New Zealand projects that its earnings will be down by NZ$35-75 million ($22-48 million) for fiscal 2020, which for Air New Zealand runs through June 30. This cuts the estimated annual profit, before tax and special items, to NZ$300-350 million, compared to the previous forecast of NZ$350-450 million released in January.

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Hainan Province moves to take over Hainan Airlines

The provincial government of Hainan, China, is moving to take control of HNA Group’s Hainan Airlines, of which it is already a major indirect shareholder.


The deal will proceed, said a source close to the provincial government and another from a creditor company. Whether to include other, smaller HNA airlines in the transaction is still undecided, said the first source.



A third source, from within HNA, confirmed that talks were underway.

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The air transport industry is in the middle of the deepest crisis in decades, deeper than what it experienced during the fallout of the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 and 2004. Partially hampered in its ability to grow by the grounding of the Boeing 737 MAX fleet since March 2019, then bruised by a U.S. policy-induced slump in global trade, and now, getting hit by the COVID-19 coronavirus outbreak, Asia-Pacific airline revenues are now predicted to fall off a cliff.

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