COVID-savaged airlines pin hopes on lifting of travel curbs, cargo, new biz

China's domestic air travel market is gradually picking up after being ravaged for months by the vagaries of the COVID-19 pandemic.

With the novel coronavirus gradually coming under control in China, pandemic-time travel restrictions are being lifted in a phased manner in most parts of the country.

In response, Chinese carriers are taking measures to stay viable and overcome problems posed by the crisis, civil aviation industry insiders said.

On May 5, when the week-long Labor Day holiday ended, there were 8,361 domestic flights, accounting for 70 percent of the volume recorded on May 4 last year, according to aviation data provider VariFlight.

After the break, China is expected to see more leisure and business travel and higher demand for flights, it predicted.

The air travel market started its summer and fall flying season in China on May 3. The 11 airlines under HNA Group will launch 134 new flights, including 19 flights that connect tourist hot spot Hainan province with other regions.

The group also launched four flights that connect Hubei province, the area hit hardest by the epidemic, and other cities, to help with its work and production reboot.

Meanwhile, the global spread of the contagion has led to a rising demand for air cargo, and a number of Chinese carriers have arranged chartered flights to transport medical supplies and other goods overseas.

Despite bearing significant financial pressures, Hainan Airlines has carried out more than 100 cargo flights to transport over 2,000 metric tons of goods to Ireland, Austria, Australia and 20 other countries.

Earlier, major Chinese airlines had issued epidemic prevention and control bonds to raise funds and save themselves financially. So far this year, Shanghai-based China Eastern Airlines and its affiliates have issued short-term bonds at least 10 times, and raised 21.5 billion yuan ($3 billion) in all.

Industry experts said the negative impact of COVID-19 has been far worse than that of SARS in 2003 and the 9-11 terrorist attacks on the United States in 2001. Governments, carriers, and other stakeholders will have to work together to face the challenge, they said.

In April, the number of flights worldwide dropped 80 percent year-on-year. This year, passenger revenues of airlines are expected to drop by a staggering 55 percent, or $314 billion, according to a forecast by the International Air Transport Association.

From the third quarter of this year, domestic markets globally could see the start of an upturn in demand as the first stage of lifting of travel restrictions kicks in. International markets, however, will be slower to resume as governments will likely retain travel restrictions longer, the IATA said.

"The industry's outlook is getting darker by the day. The scale of the crisis makes a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery. Several governments have stepped up with new or expanded financial relief measures, but the situation remains critical. Without urgent relief, many airlines will not survive to lead the economic recovery," said Alexandre de Juniac, director-general and CEO of the IATA.

Globally, more than 65 million people work for the aviation and tourism industry. If the strict travel restrictions last for three months or longer, 25 million related jobs would be under threat, the IATA said.