Issue No. 758
The Corona Crunch
Pushing Back: Inside This Issue
It’s not just a problem for Chinese airlines anymore. Or just airlines in Asia. The Covid-19 virus outbreak is now obliterating demand for travel across the entire world. Suddenly, airlines even hearty and healthy just a week earlier find themselves burning through cash as planes to cities like Milan and Seoul run empty, and as ticket sales evaporate. For the already distressed, the virus could prove lethal, as it already has for one small U.K. carrier: Flybe.
There’s still a chance for the industry to surmount the crisis with just some first and maybe second quarter bruises, if the outbreak slows and life returns to normal by early summer. Perhaps it’s just airline demand delayed, not destroyed. China, it seems, shows some faint signs of a rebound. But right now, the world is a scene of cancelled business meetings, cancelled trips, panicked travelers, government travel warnings, disrupted economies, and tanking stock markets.
And events are moving fast — just as Skift Airline Weekly is preparing to publish, Air New Zealand is scrapping its financial guidance, Korean Air is expressing concerns about its survival, JetBlue is announcing emergency measures to preserve cash, and oil prices are taking another huge tumble. Financial markets open the week in disarray.
Airlines like Turkish, Thai, and Aeroflot, all with significant exposure to China, gave their latest assessments of the damage the virus is inflicting. This week, Cathay Pacific reports financial results. And U.S. carriers will provide more commentary at a JPMorgan investor event in Atlanta. Assuming that is, it isn’t cancelled.
"The world is facing a huge challenge to prevent the spread of COVID-19 while enabling the global economy to continue functioning. Airlines are on the front line of that challenge and it’s essential that the regulatory community work with us to ensure airlines are able to operate in the most sustainable manner, both economically and environmentally, to alleviate the worst impacts of the crisis."IATA Director General Alexandre de Juniac
- October-December 2019 (3 months)
- Turkish Airlines: $336m/$28m*; 4%
- LATAM: $227m; 12%
- Thai Airways: -$30m; -1%
- Aeroflot: -$107m; -8%
- Air Mauritius: $9m; 1%
Net result in USD; operating margin
*Net profit excluding special items (all operating figures exclude special items)