An Air China plane cabin was filled with smoke after its engine caught fire, forcing the plane to make an emergency landing in Singapore on Sunday.
25.08.2023 - 14:18 / skift.com
Financiers at the center of a $200 billion industry underpinning airline fleets are meeting in Dublin this week, gambling that China’s decision to free travel will accelerate their recovery from a pandemic downturn, while warning of a shortage of jets.
Three years after the spread of Covid-19 grounded thousands of airliners, demand for air travel is booming again, boosted by Beijing’s decision last month to unwind its zero-Covid policies.
In a report on Monday, the world’s second-largest aircraft leasing company, Chinese-owned Avolon, predicted global traffic would return to pre-pandemic levels as early as June this year – months earlier than most in the industry have predicted.
The International Air Transport Association, which represents global airlines, is predicting full recovery in 2024.
“After a 70 percent recovery in passenger traffic last year led by Europe and North America, Asia will drive growth in 2023, helped by the recent reopening in China,” Avolon said.
Data so far suggests Chinese are resuming travel ahead of the Lunar New Year, despite worries about infections after Beijing ended curbs last month, with passenger traffic jumping to 63 percent of 2019 levels since the annual travel season began.
Others are not so upbeat.
“Airlines are not dramatically increasing their frequency to China. It’s going in the right direction but … it’s going to take some time,” said aviation adviser Bertrand Grabowski.
The crippling impact of Covid-19 saw dozens of airlines go out of business and wiped billions of dollars off balance sheets.
In a sharp reversal, the industry’s biggest worry now is getting hold of enough of narrow-body jets, which are the most widely used, to meet demand as battered supply chains delay new aircraft deliveries.
On top of that, severe bottlenecks in maintenance, repair and overhaul (MRO) plants are frustrating efforts to keep existing jets in regular service or get others out of storage.
“The bottom line is MRO; they are totally full,” Grabowski said, adding that stored aircraft needed extensive checks.
In public, airlines and leasing firms have deplored delivery delays and are seen likely to press aircraft makers for compensation.
Privately, many airline executives acknowledge the shortages have allowed them to hold air fares higher to help replenish balance sheets, cushioning them against fears of a recession.
The same is true of aircraft rentals charged by lessors, some of which have on average risen by double-digit percentages over the past 12 to 24 months for a variety of reasons, according to Rob Morris, global head of consultancy at Ascend by Cirium.
At the same time, a slew of macroeconomic concerns is keeping delegates on edge ahead of the annual Dublin conferences
An Air China plane cabin was filled with smoke after its engine caught fire, forcing the plane to make an emergency landing in Singapore on Sunday.
A section of the Great Wall in China was severely damaged after construction workers dug out a large gap as a shortcut to get their equipment through.
The Federal Aviation Administration (FAA) is investigating nearly 5,000 pilots who withheld mental health concerns and other ailments that may bar them from flying.
China dropped mandatory COVID-19 testing for incoming travelers on Wednesday, becoming one of the last countries in the world to do so.
China’s three largest airlines remained in the red in the second quarter, although losses narrowed significantly from the previous three months as a recovery in the domestic aviation market gathered pace.
U.S. Commerce Secretary Gina Raimondo arrived in Beijing late on Sunday for a four-day visit aimed at boosting business ties between the world’s two largest economies while declaring American national security trade measures off-limits for debate.
Searches on Chinese travel sites surged and social media platforms were flooded with delight and relief on Wednesday as the public cheered the biggest loosening of some of the world’s strictest Covid policies.
Travelers are hungry for high-end experiences, and there appears to be no sign of the luxury bubble bursting anytime soon, with China still expected to add weight to the post-pandemic revenge travel surge.
Online travel agency Trip.com Group hopes that cross-border travel capacity for China will be back to normal by the third quarter of this year.
U.S. and European airlines will benefit from pent-up demand for travel to China after its recent border reopening, but route approvals, fresh Covid-19 testing rules and not enough large aircraft remain barriers to rising sales, analysts and industry officials say.
Abel Zhao, co-founder & CEO of FreeD Group, a technology innovator that specializes in proprietary enterprise application solutions, has acquired 75-year-old Connexus Travel from the parent company of Cathay Pacific, Swire Group. Financial details of the acquisition were not disclosed.
Good morning from Skift. It’s Thursday, February 23. Here’s what you need to know about the business of travel today.