Widebody aircraft to remain idle, unless long-haul services return

Aviation analysts say airlines widebody aircraft are expected to remain idle for a long period of time in anticipation of slower recovery in international long-haul services. Pix courtesy of BoeingAviation analysts say airlines widebody aircraft are expected to remain idle for a long period of time in anticipation of slower recovery in international long-haul services. Pix courtesy of Boeing

KUALA LUMPUR: Airlines widebody aircraft are expected to remain idle for a long period of time in anticipation of slower recovery in international long-haul services.

Aviation experts said larger aircraft offers least flexibility since their capacity significantly exceeds demand on all routes as travellers were still in fear of the Covid-19 pandemic.

They said currently about 1,000 widebody aircraft remained in service simply by virtue of their cargo capacity, flying on cargo only routes (using containerised load of their belly hold plus some loading of bulk cargo into the economy passenger cabins).

However, the widebody market and older aircraft are expected to retire from service or at least stored for a long period of time, until situation improves.

Ascend by Cirium, global head of consultancy Rob Morris said airlines were seeking to minimise costs at all levels, citing that a flight needs to be flown with the most effective aircraft since demand was tepid.

“Hence, typically the smallest possible aircraft (that offers the range required) is appropriate to minimise the trip cost.

“As airlines rebuild networks, it seems likely that frequencies will remain relatively low until demand recovers strongly,” he told the New Straits Times recently.

Morris said bilateral agreement between two countries that have both contained Covid-19 will be needed to re-establishing capacity, while dependent on the confidence of travel arrangements and trusts on the destination markets.

In the short-term, the domestic and short-haul regional flights would help airlines to rebuild networks where small-capacity aircraft can be used.

Morris said the outlook for air travel remains extremely uncertain and thus it was difficult to project with any precision on how demand would likely to recover or normalise back to levels seen in 2019.

“There are many variables which airlines are not able to control – international and even domestic travel restrictions, passenger confidence, the impact of economic slowdown, impact of business recovery on business travel,– or even predict with any certainty,” he said, adding that most airlines presently were concerned to remain in business through 2020.

Ascend by Cirium has constructed three potential global traffic demand recovery scenarios to track and understand how traffic would recover.

“Our most pessimistic at present is described as three to six months hibernation period for passenger demand, followed by domestic recovery, and slow international recovery.

“2019 traffic levels are expected to reach by the second-quarter Q2 of 2023, with growth between 3.0 per cent and 4.0 per cent per annum thereafter,” he said.

Ascend by Cirium is the global team of analysts and consultants delivering powerful analysis, commentaries and projections to airlines, aircraft build and maintenance companies, financial institutions, insurers and non-banking financiers.

Morris said although the pandemic was only a few month’s old, the capacity and traffic data suggested that this was the closest scenario to actual.

“If we are to see acceleration of the recovery then we will need to see rapid removal of traffic restriction, potential development of travel bubbles between two countries which recognise each other’s health standards and a general recovery in passenger confidence and understanding that air travel is once again safe from a virus perspective.

“We are already seeing some element of domestic market recovery in China where passenger numbers are once again approaching the one million per day level, but this is still more than 50 per cent down over start of 2020, so a slow recovery process still,” he said.

Morris said airlines can take simple measures for passengers’ safety and reduce risk by enforcing them to wear masks and gloves, regular deep clean of cabins and contactless or distanced check-in and boarding processes.

“Thus, the only real solution is development of a global vaccination programme which allows us all to become confident that Covid-19 is just another disease like the many others that we live with on a daily basis,” he said.

He said the reality of social distancing and air travel was mutually incompatible as airlines were extremely unlikely to be able to sustain lower load factors in the name of social distancing.

Morris said financial assistance from government’s and other stakeholders would be critical to all airlines at present as they suffer widespread loss of revenue in the face of continued costs.

“Cash burns are high. But such support is not infinite and thus potentially this support is simply delaying the inevitable. Of course the hope is that demand (and revenues) will recover, so it is simply a question of which comes first.

“If recovery in demand is slow, then at some point support will end and we would then expect to see an increasing number of airline bankruptcies,” he warned.

By Ayisy Yusof.

Read more @ https://www.nst.com.my/business/2020/06/600484/widebody-aircraft-remain-idle-unless-long-haul-services-return

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