Page 40 - World Airnews News July 2020 Edition

NEWS

CHINESE DOMESTIC AIR

TRAVEL BREAKS 50% BARRIER

(all be it form a very low base), coinciding inces is still prohibited but comment on

with a weak restart of the economy and an various Chinese social media platforms

orwardKeys, the travel analytics increase in seat capacity. predicts that the ban will be lifted in June,

Fcompany, has revealed that domesti c Throughout March and April air travel although there is no official news yet.

air travel in China, which has been recov- continued to pick up slowly until it received Olivier Ponti, VP Insights, Forward-

ering slowly in the wake of the COVID-19 a fillip from the Labour Day holiday at the Keys, said, “At the end of April, we were
outbreak, has now reached more than 50% start of May. expecting to see an increase in domestic

of what it was at the equivalent moment in While all this sounds encouraging, it is flight bookings as soon as domestic travel

2019, based on issued air tickets. likely that a stronger recovery is underway restrictions were eased and that indeed

In addition, analysis of flight ticketing in the hospitality sector, with many people happened. Nevertheless, some restric-

data reveals a significant uptick in last choosing to drive or take the high-speed tions are still in place; so, there is potential

minute domestic flight bookings in China train rather than fly. According to the Travel for further recovery when they are also

between 11th May and 21st May. Willingness Survey conducted by China removed. With regards to international

During that period, the lead time Tourism Academy and China’s online travel travel, current strict restriction which limits

between ticketing and travel shortened agency Ctrip, in March, 41% of travellers 134 flights a week is due to be eased in the

dramatically; 72% of flight tickets were said that they would travel by car once the coming months, according to China’s avi-

issued within 4 days of the travel date, corona virus outbreak had been contained, ation authority’s statement on 27th May.
compared with 51% at the equivalent point 29% would travel by train, 16% would However, at this stage, the increased capac-

in 2019. ForwardKeys believes that this take a coach trip and only 14% would fly. ity is mainly intended to accommodate
phenomenon is significantly influenced by Furthermore, China’s Ministry of Culture the demand of overseas Chinese to return

students returning to university, as the tim- and Tourism has reported that 60% of home. I regret that there is no sign yet of a

ing coincides with universities reopening vacationers travelled by car during the recovery in Chinese outbound tourism.”
- a milestone that is expected to stimulate Labour Day holiday period. This hypothesis He said, “I expect 2020 to be the year of

Chinese consumers to travel more. is further supported by reports of hotel the ‘staycation’ for two principal reasons.
Looking back to the start of 2020, air occupancy now exceeding 60%. First, in China (and in other countries too),

travel surged in the first three weeks of The revival will certainly be welcomed the rules applying to international travel

January, thanks to Chinese New Year. by everyone in the tourism industry but it are continuously changing, which inhibits

However, the COVID-19 outbreak spoiled needs to be kept in perspective because at consumers from planning and booking a

the party and by mid-February the aviation the moment the business is mostly local; vacation abroad. Second, people are gener-
market in China had all but collapsed. In and, typically, the shorter the distance peo- ally reluctant to give up on a holiday, so, if a

the last week of that month, the recovery ple travel, the less they tend to spend. domestic break is all they can get, many will

began; and passenger traffic jumped 62.9% As of now, group travel between prov- settle for that.” Q
AIRASIA WANTS TO RAISE CAPITAL
However, AirAsia said it would not report said that around 80% of the

disclose information on the proposals, MYR1.5 billion figure will be guaranteed
he AirAsia Group is evaluating citing confidentiality. by Malaysian financial guarantee insurer

Tproposals to strengthen its eq- AirAsia Group made the disclosure in Danajamin Nasional, while the remaining
uity base and liquidity through a capital response to an article by Malaysian news- 20% will be “corporate guaranteed”. Ciri-

raising exercise, as it works to overcome paper The Star, which reported that the um has contacted AirAsia for comment.
challenges caused by the corona virus low-cost operator is in talks to sell a 10% The pandemic’s impact led AirAsia
pandemic. stake to South Korean conglomerate SK Group to announce on 29 April that it
In an earlier Bursa Malaysia disclosure, Group through a private placement. would evaluate its orders for Airbus

the group said it had been present- SK Group subsequently confirmed aircraft, and not take delivery of any new

ed with proposals from “investment those talks to the South Korean Maeil aircraft for the rest of 2020. Executive

bankers, lenders, as well as potential Business Newspaper on 5 June, and chairman Kamarudin Meranun said the
investors to help the company weath- added that it had yet to decide whether company’s decision to sell and lease

its aircraft in late-2018 had also given
er the storm caused by the Covid-19 to make the equity purchase.

pandemic”. The Star report added that the Malay- it greater flexibility to reduce growth

instead of owning aircraft.

In addition, the airline has “ongoing sian government is looking at arranging

deliberations” with several parties for a MYR1.5 billion (US) $352 million cash Malaysia AirAsia resumed domestic

joint ventures and collaborations, which injection into three local carriers, including operations on 29 April, after suspending

may lead to “additional investments in AirAsia, to help the Malaysian airline indus- operations on 28 March. Q

specific segments of AirAsia Group’s try “prepare for operations post Covid-19”.

businesses”. An unnamed source quoted in the Article courtesy: www.flightglobal.com
World Airnews | July 2020
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