AviationSIA says it is ‘a little more vulnerable’ without a domestic market

Domestic services in Asia key to airline recovery

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CAPA says domestic markets in Asia appear to have bottomed out.
CAPA says domestic markets in Asia appear to have bottomed out.

SYDNEY – Airlines that operate in countries with strong domestic networks will be best placed to recover from the Covid-19 pandemic and its huge impact on flight services.

We are already seeing the value of a strong domestic market in the recoveries of China and South Korea. It will be similar in Australia and New Zealand, while Vietnam Airlines has high ambitions to restore much of its domestic flying within a couple of months,– CAPA

CAPA, the Centre for Aviation, says in a report that although having domestic routes will not guarantee success, they should provide a valuable foundation for many airlines’ eventual recoveries.

“We are already seeing the value of a strong domestic market in the recoveries of China and South Korea. It will be similar in Australia and New Zealand, while Vietnam Airlines has high ambitions to restore much of its domestic flying within a couple of months,” CAPA says in its ‘Airline domestic route rankings highlight Asia-Pacific recovery’ report.

Domestic markets in Asia appear to have “bottomed out sooner,” and can reasonably be expected to be “leaders in the airline industry’s recovery,” says CAPA, which warns that initially airlines have been flying routes with little or no passenger demand and it will be “a bumpy path of recovery”.

Singapore Airlines CEO Goh Choon Phong told a press conference a day after the company released its full-year results last week, that one problem for the airline is its lack of a domestic market.

"Of course, if they (airlines) have a domestic market, they would have some cushion. In our case, we are a little more vulnerable because we don't have a domestic market to depend on, which is typically the last to be closed and likely to be the first to be opened," Mr Goh said.

"Because we don't have a domestic market, any operation we do would require other governments to lift travel restrictions and border control, so we need to understand how that will be put in place," he added.

SIA has reported an annual net loss of S$212 million (S$148.7m) for the year ending March 31, the first loss in the airline's 48- year history.

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