As uncertainty persists over the future path of COVID 19 airlines with a mix of domestic and international reach, have greatest flexibility in how to respond, says aviation analysts Cirium in a report issued today.
Given that travel restrictions have been imposed on a country-by-country basis, Cirium says that short-haul flights mostly run by low-cost carriers and domestic flagship carriers, can be first-to-market when restrictions lift.
Cirium cites the example of China, where domestic flight activity has already shown signs of resurgence. Cirium data show that about 5,400 domestic flights per day took place at the end of March in China compared to 1,800 per day in mid-February.
While for the US market, Cirium says that the outlook for carrier is dependent on which parts of the domestic market local carriers are linked to given that the majority of restrictions have been placed on international, rather than domestic flights.
“With New York being stated as the global epicentre of the virus and thus the nation’s current hot spot, the global impact falls heavily on the major US carriers with hub operations at one or more of the NYC airports” say Cirium.
Cirium predicts that some markets will recover quicker than others with the corollary that carriers with operations spread across multiple regions or markets will have opportunities to bring service back online market-by-market.
“International flights serving the Chinese market hadn’t yet begun to recover by the end of March. However, the COVID-19 cycle will likely play out there first, thus creating opportunities for certain global carriers to reopen service there, ” said David White, of Cirium Market Insights.
Cirium says the result could be changes in airlines’ route planning mix, depending on external factors like traveller demand. According to Cirium, airlines will evaluate their hub and spoke routes verses point to point opportunities, to determine first priority.
“Those who have normally depended on hub and spoke, may have to compare opportunities based on which routes are first available and which ones are essential to business profitability,” says Cirium’s report.