The coronavirus has had a devastating impact on Chinese and other airlines and in the Asian region, and will continue to do so until the outbreak is controlled.
For carriers that were already in trouble, the latest shock may well finish them, with Hong Kong Airlines tipped to become a casualty. At the same time, even healthy airlines have asked lessors to defer lease payments for the next few months, a request that lessors inside and outside China appear amenable to, at least for a short while.
Another avenue being explored is for Chinese aircraft to be redeployed in other regions. US lessor Air Lease has revealed that it is minded to buy aircraft and place them under short-term leases in Europe for the summer season, following requests for sale from several Chinese and other Asian airlines suffering from short-term liquidity issues.
If aircraft are redeployed it would help to mitigate some of the capacity issues faced by carriers suffering from the Boeing 737 Max grounding and Airbus A321neo delivery delays, while also removing unneeded metal from the fleets of Asian airlines hit by a huge slump in demand.
It also might present opportunities for cabin modification providers, although it could be that some aircraft will be deployed in their original configurations and liveries due to the limited duration of their onward leases.
Dublin-based Avolon has also reported a surge in sale-and-leaseback requests from Chinese airlines, and although no-one will want to boast of any commercial benefit from coronavirus, it is likely that the surge in supply will restore some normalcy to pricing in a market that has suffered from fierce competition in recent years.
