International airlines are operating empty ‘ghost’ flights in case they lose their airport flight slots, while cruise ships, in locations ranging from California to Bali and the Nile, face problems or quarantine associated with COVID-19 coronavirus .
The ‘ghost’ flights largely relate to Europe. Demand for flights has collapsed around the world, but under European rules, airlines must continue to run 80% of their allocated airport slots – or risk losing them to a competitor.
According to London’s Times newspaper, some airlines are flying empty planes into and out of European airports – a situation that has prompted UK Transport Secretary Grant Shapps to demand the rules be suspended during the coronavirus outbreak, to prevent economic loss and massive fuel waste.
The International Air Transport Association (IATA) expects 2020 global revenue losses for the airline passenger business of between USD 63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March 2020) and USD 113 billion (in a scenario with a broader spreading of COVID-19).
Airline share prices have dived nearly 25% since the outbreak began.
MEANWHILE, in an indication of what airport slots can be worth, Air New Zealand has sold its valuable London Heathrow slot to an undisclosed buyer for NZD 42 million (USD 27 million), according to Forbes magazine. After 38 years, the New Zealand carrier will end its Heathrow service in October and redeploy capacity to faster-growing markets. Air New Zealand announced its decision to end the Los Angeles/London service over four months ago – well before the COVID-19 crisis began.
CRUISE LINES face challenging times, with Grand Princess still off the coast of California, its passengers and crew in quarantine. US Vice President Mike Pence said at the weekend the US was taking “decisive action” to deal with the crew of another cruise ship that may have shared crew with Grand Princess and Diamond Princess. He did not name the ship.
Pence told a press conference: “We want to recognise from the experience now of two cruise ships, that cruise ships represent a unique challenge for health officials, and so we would ask elderly Americans to use common sense and caution in planning any cruise ship vacations in the future.”
Considering the demographic of some cruises, those words are significant.
US Vice President Mike Pence addresses the US public at the weekend on the subject of COVID-19 coronavirus
Bali yesterday refused to let the Viking Sun dock at Benoa Port, or its passengers land, out of concern over coronavirus. No cases have been reported among the 800 passengers (mainly from Australia and the US) aboard Viking Sun, or the ship’s crew.
The Thai holiday island of Phuket turned away the Costa Fortuna cruise ship on Friday, despite there being no suspected virus cases aboard, the Bangkok Post reported – and Malaysia has banned all cruise ships from the country’s ports, according to Malaysia’s Star newspaper.
Egypt confirmed 33 new cases of coronavirus on a Nile cruise ship after a Taiwanese-American woman who had been on the cruise tested positive for the virus on returning home. The ship, which arrived in the southern Egyptian city of Luxor from Aswan, has been towed to a position outside the city and placed under quarantine.
Nine Americans (six in Texas and three in Maryland) were reported yesterday to have caught the coronavirus on the same Nile cruise.
Back to the air, IATA issued estimates of the anticipated fall in airline passenger numbers, due to COVID-19, as follows: China (-23%), Japan (-12%), Singapore (-10%), South Korea (-14%), Italy (-24%), France (-10%), Germany (-10%), and Iran (-16%). Additionally, Asia (excluding China, Japan, Singapore and South Korea) would be expected to see an 11% fall in demand. Europe (excluding Italy, France and Germany) would see a 7% fall in demand and Middle East (excluding Iran) would see a 7% fall in demand.
Globally, this fall in demand translates to an 11% worldwide passenger revenue loss equal to USD 63 billion. China would account for some USD 22 billion of this total. Markets associated with Asia (including China) would account for USD 47 billion of this total.
COVID-19 is spreading rapidly and IATA says total losses could blow out to USD 113 billion in a scenario with a broader spreading of the coronavirus. That would impact the industry on a scale equivalent to the Global Financial Crisis.
“The turn of events as a result of COVID-19 is almost without precedent,” IATA’s director general and chief executive, Alexandre de Juniac, warned.
“In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse. It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a USD 63 billion revenue loss, or a broader impact leading to a USD 113 billion loss of revenue, this is a crisis.
“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times.”
Written by Peter Needham
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