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Airlines see a bleak 2020

Different reality from one airline to another

LONDON, March 27, 2020

With a yield decrease of around 5 per cent year-over-year in January/February airlines lost 8 per cent of revenues compared to the start of 2019, according to Holland-based consultancy, WorldACD.
 
“In our provisional data for February, published two weeks ago, we mentioned that worldwide air cargo fell by 2.7 per cent year-over-year (YoY) in the first two months of 2020. The more final figures, available now, show a drop of 3 per cent. Note that this figure does not take into account that February had 29 days this year, rendering the year-over-year (figures for that month actually a bit flattering,” the consultancy said.
 
In view of the still fragmented bits of news about March, and the dark expectations for the second quarter of 2020, soon this 8 per cent drop will turn out to be a relatively mild result.
 
Aviation has entered a period of extreme uncertainty about its immediate future. Whilst the overall picture is very bleak, the starting positions of individual parties show large differences. The average 3 per cent year-over-year decrease mentioned above, hides starkly different individual performances, telling a fascinating story of today’s battlefield.
 
In Asia Pacific, individual airlines’ year-over-year performance in the first months of 2020 ranged from -12 per cent to +17 per cent YoY  (total for all was -2 per cent). In Europe, where the total for all airlines was -7 per cent, the range was much bigger, going from -36 per cent for one airline to +42 per cent for another. In North America, one airline noted a drop of 20 per cent, whilst another airline grew by 3 per cent (for all, the figure was -7 per cent). In MESA (Middle East & South Asia), the worst performing airline showed a loss of 23 per cent YoY, whilst the best one could boast of a 17 per cent growth (for the total, the figure stood at 0 per cent). Worldwide, full freighter airlines as a group did not outperform airlines with passenger aircraft.
 
Among the world’s top-30 forwarders, those originating in Asia Pacific jointly lost 9 per cent in year-over-year volume, with the worst at -17 per cent, but the best at +43 per cent. The Europeans as a group lost 6.5 per cent, with a spread between -23 per cent and +9 per cent. And the North American forwarders as a group lost 5 per cent, the best among them being at the same level as in the first two months of 2019, and the worst at -21 per cent.
 
Impossible to say whether the performance in 2020 so far is any indication for each party’s fortunes in the months to come. As many airlines reduced their flights to China in February already, capacity constraints led to yields from Europe and North America to China which were not only double the average of the past 12 months, but also higher than the yields in the other direction. 
 
“Nobody can predict for how long such an unexpected development may last. While we brace ourselves for the short-term impact of COVID-19, we all wonder about the long-term impact on supply chains, consumer spending and world trade.”
 
Provisional March data will be available in about two weeks, giving much more detailed insights in what no doubt will be an upheaval not witnessed before in aviation. -- Tradearabia News Service
 
 



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