The Coronavirus COVID-19 is negatively impacting demand for air travel and airlines are taking measures to mitigate and contain the negative effects. QANTAS will temporarily ground eight of its twelve strong A380s until mid-September.
The airline has already reduced the number flights and capacity by using smaller aircraft from Australia to Hong Kong and Singapore with services to Shanghai (Pudong) remaining suspended. The further cuts would be related to reduced flying of the Airbus A380 and downgrading capacity on selected 747 services by using A330s.
Reduction of Airbus A380 flying and routing changes to London flights
Effective 20 April 2020, the A380 operated QF1/QF2 services will change to the Boeing 787 and operate via Perth effective offering a double daily non-stop. These changes will result in the loss of a First Class service to Singapore which means the recently opened First Lounge at Changi Airport will be temporarily closed.
There are presently two aircraft undergoing the refurbishment program, offering the latest 787 style Business and Premium Economy. Only two A380 aircraft will used until September with the sole remaining A380 route being Sydney – Los Angeles. A380 services to Dallas will also change to the 787 from 20 April 2020. The previously announced change of the A380 to 787 on the Melbourne – Singapore will change to the A330 from 04 May 2020. The second daily Melbourne – Singapore (QF35/QF36) will be cancelled from 20 April 2020.
The grounding of the A380s is a move similar to Germany’s Lufthansa which announced its entire fleet of fourteen A380s, will be temporarily grounded.
Boeing 747 services
The Sydney – Tokyo (Haneda) flights, presently operated daily by the Boeing 747 will be replaced by Airbus A330 aircraft from 30 March 2020. Capacity on flights to Japan is being closely monitored with the possibility that the Tokyo Olympic Games, due to start on 24 July 2020, may be cancelled.
San Francisco which fare-welled its 747 services on 03 December last year, being replaced by the 787, will see the reintroduction of the 747 from 18 April 2020. The recently launched Brisbane – San Francisco and Melbourne – San Francisco 787 services will be suspended from 18 April 2020. Furthermore, the inaugural Brisbane – Chicago 787 flight will be postponed from 15 April until late September.
The introduction of the 787 on Sydney – Santiago will be delayed. The 747 will continue operate on this service until early August.
The seasonal 747 Sydney – Vancouver flights will not operate in June/July as planned.
Extension of reductions and cancellations for Hong Kong and China services
QANTAS’ sole remaining mainland Chinese destination, Shanghai-Pudong will now remaining suspended until at least mid-July. The previously announced reductions to Hong Kong flights will remain now until mid-September. Sydney – Hong Kong reduced from 14 to 7 weekly services. A further reduction one extra weekly service will apply on Melbourne – Hong going from 7 to 4 times weekly and Brisbane – Hong Kong from 7 to 3 times weekly.
Global implications of COVID-19 to the airline industry
The International Air Transport Association’s (IATA) initial assessment of the COVID-19 outbreak shows a potential 13% full-year loss to demand for carriers based in the Asia-Pacific region. In terms of revenue for 2020 it would mean a loss of close to US$27.8 billion. IATA’s forecast and predictions are based what happened to the industry during SARS in 2003. IATA acknowledges that these are “challenging times for the global air transport industry”.
Given the bleak outlook by IATA, airlines are taking the appropriate measures which are not just limited to capacity/network adjustments but go further to curb costs and contain losses. Staff worldwide are being encouraged to take unpaid leave and overall there is hiring freeze on new staff.
These drastic measures in the airline industry have been seen before from the oil crisis in the 1970s, the Gulf War, the 9/11 terrorist attacks and of course SARS in 2003. Airlines have collapsed along the way because of these events, however those that have taken appropriate measures have been resilient and survived. The COVID-19 has been with us for around three months so it remains to be seen what the long-term implications are for the airline industry.