Coronavirus: Can domestic travel alone buoy Chinese aviation?
03/31/2020|7:15:28 PM|The Straits Times

The Chinese aviation industry, which ground to a halt when China limited travel both domestically and internationally in an early move to curb the coronavirus spread, has started showing signs of partial recovery.

But as the country faces an increasing number of imported cases, new regulations kick in on March 29 limiting international flights, raising concerns about whether China's domestic market alone will be enough to keep carriers out of the red.

The Chinese aviation industry was hit hardest in mid-February, with capacity down by up to 70 percent from the same time last year, said OAG Aviation data.

A report from Caixin put losses by China's six top publicly listed airlines at 22.3 billion yuan (S$4.57 billion) as of last week. Millions of trips have been canceled and with the slowing economy, business travel is also being postponed because of cash flow reasons.

China tightened the noose again to mitigate imported Covid-19 cases. From Sunday, all Chinese airlines are allowed just one flight a week to each international destination, while foreign airlines like Singapore Airlines are only allowed only one flight a week into China.

For the industry to stage a full recovery, it would also require international travel to be fully restored, which might take months yet. International travel last year was responsible for 103 million airplane seats.

Furthermore, with little competition, Chinese airlines tend to be reliant on government support, said analyst Saj Ahmad of StategicAero Research.

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