Airlines Business & Finance

Global Airline Capacity Cut By 35% Due To Coronavirus

The outbreak of coronavirus has impacted over a third of the world’s aviation capacity. Since the start of the crisis over 37 million seats have been cut as travel restrictions prevent airlines from operating at full capacity. That’s an average cut of 35%. However, some areas have been affected by as much as 80%.

The recent virus outbreak has been impacting airlines around the world for several weeks now. But it only just becoming apparent how extensive the damage is. Over 37 million seats have been cut since the start and airlines are beginning to struggle financially.

Just last week, the tenth week of the epidemic, capacity was cut by 21 million seats, representing a drop of 23% according to the OAG. The OAG has also warned that these figures are likely to get worse at more airlines will be forced to temporarily stop operations.

The crisis is truly a global one with no area unaffected. However, some regions are more severely impacted.

According to recent figures, Western Europe is one of the worst-hit regions with a 53% drop in capacity in just a week. Latin America followed closely behind with a 42% decline.

More than a third of the world’s airline capacity has been wiped out in the first 10 weeks of the coronavirus crisis, accounting for a staggering 37 million seats. However, Emirates’ decision to suspend all operations will have a huge impact on the Middle East area which is already down by a third.

North America has so far been the least affected with capacity down by just under 10%, although is expected to change dramatically for the worse in the coming weeks. The Southwest Pacific region is also not too heavily affected by a 17.5% drop. South-East Asia has so far seen just under 30% loss in capacity.

To contrast the huge cuts in capacity, China is now looking to add routes as it recovers from the virus. Over 217,000 seats have been added recently. The Chinese carriers who were initially hit the hardest, are also looking like they will recover soonest.

Despite the glimmer of hope from the Chinese airlines, the OAG has said that things are most likely going to get worse for the aviation industry before they get better. Ryanair, SAS Scandinavian, and Spanish airline Iberia have been forced to make the biggest cuts in recent weeks. But this could be about to change as the American carriers are facing tougher and tougher conditions.

Airlines are being forced to park planes as travel demand plummets and schedule changes are coming in thick and fast. In its weekly update, the OAG commented that:

“Perhaps the biggest concern is that the current “top four” airlines are still supplying OAG with their latest schedule changes and the record week-on-week capacity reductions we have seen exclude the majority of cuts those airlines have announced but are still working through”.

So, more cuts are already happening. Some countries have already seen their capacity cut by over 62%. This includes Spain, Singapore, and Portugal. Many of the airlines which have been affected are asking for government support. The biggest airline alliances have even released a joint letter requesting support.

As the OAG warns further cuts are to be expected, airlines will need to prepare for more financial instability. It seems as if the worst is not yet over.