Coronavirus sends China’s aviation industry free fall

US, WASHINGTON (NEWS OBSERVATORY) — China’s desire to become an international aviation center crashed in a collision with the coronavirus epidemic. Even now, when the number of infections in the Celestial Empire itself is falling, indicators are growing in other countries of the world, which primarily affects transportation.

People are scared and are not eager to travel. And it’s not just about tourists: companies cancel business trips of employees, one after another the organizers of the largest conferences refuse to hold events.

According to the International Air Transport Association (IATA), more than 70 countries and territories as of March 5 imposed travel restrictions and tightened visa requirements for travelers from China.

According to OAG Aviation Worldwide, China’s general air service is now recovering from its lows: from January 20 to February 17, it sank to 25th place in terms of global market share, but this week again took second place.

However, this is mainly due to the fact that Chinese airlines reduce domestic fares to a record low, and the government distributes subsidies. So the point is not the increase in basic demand, which remains extremely weak, SCMP notes.

“Of the 2.9 million planned flights returning to the Chinese market, all but 3 thousand are domestic flights,” OAG Aviation Worldwide reports March 2. “Reports from industry sources show that the sharp recovery in capacity was the result of extremely low fares.

Especially “that the Chinese government is making every effort to return to its places of permanent residence the residents of the country who have been locked up in other regions after the lunar New Year.”

So, Shenzhen Airlines, a division of the state airline Air China, offers for only 100 yuan ($ 14) one-way flight from Shenzhen to Chongqing. This is approximately 5% of the standard price of 1940 yuan ($ 276), which usually costs a 1,000-kilometer trip.

This week, Chinese authorities announced that they would pay domestic and foreign airlines to restore flights that were canceled due to coronavirus. According to the China Civil Aviation Administration (CAAC), for each available seat Beijing will issue 0.0176 yuan ($ 0.0025) per kilometer on routes served by several carriers, and 0.0528 yuan on routes served by only one carrier.

But with the increase in the number of infections spreading outside China, particularly in South Korea, Italy and Iran, international restrictions are likely to continue.

“Some sort of decision will be required to lift the suspension, indicating that the epidemic is under the control of the relevant health authorities, including the medical board of the airlines themselves,” said Andrew Charlton of Aviation Advocacy.

According to analysts, WHO declared the outbreak “a public health emergency of international concern,” but still has not called it a pandemic, which could lead to a further reduction in air travel.

China has a huge share in the aviation market after several years in a row pumped enormous amounts of money into the industry in an effort to increase the status (and passenger flow) of as many of its airports as possible to the level of London and Tokyo air harbors.

For example, the new Beijing Daxing International Airport was opened last year. Its construction cost the PRC 120 billion yuan ($ 17.3 billion).

In addition, last year, additional investments were attracted to the development of airports in Shenzhen and Guangzhou: against the backdrop of anti-government protests in Hong Kong, the PRC authorities hastened to occupy a vacant niche and strengthen the position of their air harbors in the international market. However, now experts are not sure that the rush was justified.


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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.