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AIRLINE NEWS Asia Pacific airlines in ‘survival mode’, warns IATA


The International Air Transport Association (IATA) has pointed to a worsening situation for Asia Pacific’s carriers due to Covid-19 and warns ‘more casualties’ could follow after Virgin Australia entered voluntary administration in April. Conrad Clifford, Regional Vice President,


Asia Pacific, IATA identified India, Indonesia, Japan, Malaysia, the Philippines, the Republic of Korea, Sri Lanka and Thailand as countries requiring urgent assistance in the form of direct financial support, tax relief loans, loan guarantees and support from the corporate bond market. He said: “The situation is deteriorating.


Airlines are in survival mode. They face a liquidity crisis with a US$61 billion cash burn in the second quarter. “We have seen the first airline casualty


in the region. There will be more casualties if governments do not step in urgently to ensure airlines have sufficient cash flow to


passenger demand year-on-year in 2020. The estimates are based on a scenario


resulting in aggressive travel restrictions lasting for three months, followed by a gradual lifting of restrictions in domestic regional and intercontinental markets. “In Asia Pacific, 11.2m jobs are at risk,


including those that are dependent on the aviation industry, such as travel and tourism,” added Clifford. However, some much-needed signals of


tide them over this period.” Global airlines are estimated to shed


$314bn in pax revenue in 2020, according to IATA data released in mid-April. IATA has predicted a $89bn loss in


revenues for European carriers and a 55% slump in passenger demand this year. Asia Pacific airlines are forecast to suffer a decline of $113bn and a 50% plunge in


optimism emerged shortly before press, with Emirates resuming some limited passenger services and Etihad Airways is planning to operate a reduced network of


scheduled services in May, dependent on travel restrictions.


AirAsia restarts domestic flights; more to follow


Malaysian low-cost carrier AirAsia resumed scheduled domestic flights on 29 April following the suspension of all services due to the Covid-19 pandemic. The resumption began with the airline’s


Malaysian operations and will be followed by Thailand (1 May), the Philippines (1 May), India (4 May) and Indonesia (7 May), subject to approval from authorities. Air Asia says services will gradually


increase to include international destinations across the network. This will take place once the situation


‘Maximise ancillary revenues’, airlines told


Airlines should use the time in lockdown to position themselves for the recovery by exploiting ancillary revenue opportunities, according to travel retail stakeholders. Speaking to TRBusiness in an extended


interview on the potential for airlines to exploit omnichannel opportunities during Covid-19, Kian Gould, CEO and Founder, AOE said: “Airlines must position themselves more as lifestyle brands which can sell things to passengers other than tickets. “They must communicate with


passengers when they are not thinking about flying which is currently the case. I think this is a very clear path for airlines and the conversations we are having with some of them are moving in that direction. They recognise the fact they need to be ready to


MAY 2020


maximise ancillary revenues when things start picking up. “This is because they understand there


will not be a scenario where everyone begins flying again immediately. If an airline can make a passenger spend slightly more by having a compelling digital offer, that is a big bonus.” In TRBusiness’ Adapt & Survive video


series, inflight expert Joe Harvey added: “One of the things that fascinates me about airlines is why do they still charge €15/$16.2-€20/$21.6 for wifi onboard, when you have an opportunity for people to buy your products? “It’s not just inflight duty free, but home


delivery, ancillaries like car hire and hotels. They should be looking at it as an investment into selling ancillary services.”


TRBUSINESS 11 Source: AirAsia


improves and governments lift border and travel restrictions. While flights have been grounded,


the airline has launched a new ‘Save Our Shops’ initiative to support struggling travel retailers during the pandemic.


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