Briefly –

What To Expect This Week & Beyond

A Bit of Context, First

To Start… Numbers found in media and CDC sources:

The US population is 330,400,000.

As of today, it is estimated that @7,500 people in the USA are known to be infected. Figure the actual number may be a multiple of that – maybe ten times – as it is reported that most cases are not severe.

Deaths in the USA reported as of 3/16/20 are at 69

Putting this in context, 40 of these are in just one state – Washington  – and a major percentage of those occurred in one elderly-person nursing home.

Doing the math – not to minimize the danger of the virus – gives a very different perspective from the news videos of panicked people fighting over a box of Charmin at the supermarket.

Global – Not Local – Air Service Reductions

It’s not just the USA, the China virus is causing airlines across the globe to literally shut down partially or entirely.

The reason is simple – the demand is not there. Some of the reporting in the media is quite shoddy, implying that it’s all just a matter of government decision-making. It’s due to people staying home. Here and across the world.

Almost 33% of all US enplanements are driven directly and indirectly by international traffic flows, which are now essentially gone. The economic damage across the globe would indicate a very slow recovery of this sector.

A Skeleton System Is Possible

Remember, the five major network-based carriers – AA, DL, UA, WN and AS – are based on revenue systems, not individual “routes.” This means that reduced capacity at one airport or at a connecting hubsite will affect more than just the nonstop market itself.

What needs to be kept in mind is that air service at the vast majority of small to mid-size communities depends on the aggregation of traffic at these carriers’ connecting hubs. (Yes, and in many cases, that includes WN.) Reduced flights and capacity at the carriers’ connecting hubs will affect these airports first… constricting traffic flows from smaller feed markets.

Regionalization is likely – within regions, watch for consolidation of an airline’s service into fewer airports.

Hotel & Resort Closures – Flights Notwithstanding, No Place To Stay

We are seeing entire resorts in Las Vegas lock the doors, in some cases until May. That may spread across the country to entire sections of the hospitality industry. This means that discretionary travel will drop for the next six weeks. Airports with significant percentages of ULCC traffic need to take a hard look at reduced revenue streams.

Restructured Airline Fleets

Airline margins are thin. If this crisis situation continues for an extended period, it is not out of the question that a complete re-structuring of the air transportation system could be in the cards.

As one example, a lot of 50-seat jets have been living on the wave of a strong economy and very strong demand. Even with lower costs of jet-A, the rebound may leave a lot of these airplanes in the desert.

Point: a number of hub-feed markets might not be back.

BGI Clients Standby For Updates…

Boyd Group International will be monitoring events and will be in contact with our clients throughout the week as events unfold

____________________________________

BGI Stands Ready…-

Forecasts & Contingency Planning –
Effects of COVID-19 On Your Air Service

U.S. carriers are now making capacity cuts and fleet shifts in order to deal with the COVID-19 epidemic. International traffic was first.

Now, domestic restrictions are coming – big time.

The rapid decline in domestic bookings has route planners dissecting the financial status of every route and market.

The question is, do you and your board and community have a clear picture of what to expect? There’s a lot of blind speculation.

You need hard facts and unvarnished forecast projections, not guesses or wandering media suppostion.

Boyd Group International can help with a professional COVID-19 forecast analysis.

As the leading forecast firm in aviation, which entails ongoing and in-depth research on airline strategies and fleet trends, we have the data, expertise and industry knowledge ready now to provide you with a comprehensive COVID-19 Traffic & Trend Forecast, based on known and potential scenarios that are specific to your incumbents and the projected timelines of this epidemic.

We would strongly recommend that the effects on your air service access be fully researched and understood. Take control of the information stream with hard, factual data and projections.

• Every airport has different vulnerabilities and strengths. The traffic shifts and capacity changes caused by the spread of this disease will be driven by a range of factors that are specific to the unique traffic base at each airport.

• For example, your local passenger mix is a critical factor. Leisure traffic – and particularly highly-discretionary leisure traffic – will be affected differently than business travel. In many cases, corporations large and small are slashing air travel, while there are at least anecdotal indicators that some leisure sectors are not as heavily affected.

• The effects on propensity to fly will be different from airport to airport. One thing we are assured of is that there will be airline capacity changes. Fleets will be shifted. Some markets capacity-reduced, others even cut completely. Airlines are losing money, and they will take drastic actions should this epidemic continue to spread. Also, even after it is over, some of the changes made could be more than temporary.

• Each Airline has different fleet and market strategies. American is parking most of its wide-body airliners for the next six weeks. Delta is pulling down a reported 300 airliners. The very different passenger stratas on ULCCs will also result in different reactions to the crisis. The point is to determine where they find highest and best use of the remaining fleet.

Get A Professional Forecast – Now. The Boyd Group International team will literally dissect your current air service situation, in light of the expected and possible capacity and route determinations by each of your incumbents.

The BGI Forecast Deliverables:

• Step One: Destinational Review & Consumer Segments. The current O&D patterns and revenue-generation at your airport will largely determine what changes incumbents may pursue. We will analyze your top markets, including load factors, revenue factors, hub-feed delivery, capacity, current fleet, and other dynamics.

• Step Two: Vulnerabilities of Current Air Service In The New Environment. The forecast will review the key aspects of your current service in regard to strength and weaknesses within the marketing and hub-feed strategies of each incumbent carrier, in response to the effects of the epidemic. Remember, airlines are revising their entire route systems – what’s done at other airports can and will affect yours.

• Step Three: Forecast Scenarios – High, Baseline and Low. Boyd Group International will prepare a 12-month forecast, based on several scenarios, including capacity changes, fleet substitutions, length and severity of the epidemic. Included are key vulnerability areas specific to your airport.

• Step Four: Recommendations & Planning. The Forecast will include professional recommendations regarding outreach and liaison with incumbents, as well as outreach to the community and stakeholders. The data and the message need to be clear and understandable to all stakeholders

Time Is of The Essence. Boyd Group International understands the rapidly-evolving nature of this crisis. Because forecasting is our business, and because we’ve built extensive traffic and forecast databases, we can deliver your data quickly.

We’ll Be There As Events Evolve. In addition, this is completely new territory, so  count us on-board for the following 60 days to keep you updated with recommendations and insight as events may dictate.

Give us a call, or click here to email now to get started. There are some tough times ahead, and the more you understand, the easier it will be to bring your community on board.

THE BOYD GROUP INTERNATIONAL TEAM

February 17 Update

737 MAX – A Kiwi Until The Fall?

According to reports, the scrutiny of the 737 MAX may have uncovered some additional issues that could delay the return of these aircraft to the global skies.

For American and United, not great news, but they do have other single-aisle airliners coming on line, both new and used, operated both in-house and outsourced. The lightweight media stories about cancellations are misleading… these are seats that aren’t being put into the schedule in the first place.

Southwest, as of now, has no real options. Even prior to Max issue, they’d already scoured the earth for used -700s, and maybe looking at used -800s, although there are not many out there on the market.

_______

Bombardier Exits Airliner Business – After Shaking It Up Big Time

Bombardier of Canada – once arguably the #3 global airliner manufacturer – has now divested itself of most of its involvement in the aircraft business.

At least it goes out with an increasingly loud bang, and one enormous legacy.

Bombardier’s CSeries – now the Airbus A220 – already has 764 orders on the books, with over 300 of these from carriers in North America.

Teething problems attendant to any new airliner aside, the A220 is the game changer that pushed industry giants Airbus into the A320Neo program and Boeing into the 737MAX.

Not too shabby for a relatively small company in Canada.

_____________

Coronavirus & U.S. Airport Readiness…

We can start with this: for the time being, most U.S. airports and airlines have no real immediate threat from the coronavirus epidemic.

Overall, the U.S. has pursued an aggressive and pro-active program to identify potential entry points for the disease. And it is a nasty, highly-contagious and highly deadly disease.

One sometimes-repeated bit of nonsense is that it’s no worse than the common flu… and buttressed by the non sequitur and stupid statistic that more people died from it than coronavirus. That bit of malarkey has gone silent now that the “official” death tally in China is over 1,600. (Take that and treble it, and you’ll still probably be short of the real number.)

People don’t fall down dead or almost dead on the streets of Omaha due to the common flu. But that’s happening in cities across China.

China Air Transportation System: It’s Not Going To Fully Recover. For airports across China, this is a nightmare… Based on reports from inside China, domestic air traffic right now is down as much a 70%, depending on the source.

Don’t buy into the babble from the usual “analyst” suspects that this will be just like the effects of the 2003 SARS epidemic – the traffic will bounce back soon after the crisis is over.

No way… this is a whole different situation than 17 years ago. For one thing, airports in China were handling less than 300,000 passengers then. In 2019, that figure was 1.4 billion. For another thing, this epidemic has likely exacerbated the challenges that were already facing the Chinese economy.

Lots of Open Gates. Lots of Room On The Great Wall. As of this date and with the information at hand, our Airports:China™ forecast is for China’s airports to handle over 400 million fewer passengers in 2020 – a 30% decline, after a decade of 10% annual growth.

And that’s a best-case scenario.

We cover this in an update at www.BoydGroupChina.com. The situation is dire, and the formerly exciting expectations for China-U.S. air traffic of just a year ago are gone.

You Betcha – Flying Is “Safe” In China– Just Don’t Get Close To Anybody. The bungling – or, worse the cover-ups – in handling this epidemic by the Chinese Communist Party – has been shameful.

Even as they are quarantining millions, they publicly are denouncing countries that are cutting off air service. This whole mess started because they let millions of people travel from Wuhan – after they knew full well that there was a virus epidemic. Political correctness and avoiding embarrassment, don’t ya know.

This isn’t doing Chinese airlines – which have increasingly earned global reputations for first-rate air service – any favors. But is putting the kibosh on a lot of future air travel to China. Given the shenanigans of the PRC government, there’s going to be a “enter at your own risk” sign on the national door for a long time to come.

One ridiculous missive recently put out in China states that it’s safe to take an airplane trip – in fact, it’s the safest way to travel, they tell us – as long as you don’t sit too close to others, as transmission of the virus is unlikely more than a couple seats away. Oh, and a window seat will give you the least exposure, too.

They must think we all just fell off a turnip truck to believe this malarkey.

North American Carriers: Limited Effect on Bottom Lines. What will bounce back, however, are the three U.S. airline systems that have found it necessary to cancel all service to China. While this is a short-term fleet planning disruption, American, Delta and United have other opportunities with that capacity.

Perspective: In 2019, there were approximately 7.8 million air trips between the U.S. and China, via all routings – nonstop and over other Asian connect hubs. That’s within approximately 560 million total U.S. air trips. (Trips, not enplanements, by the way.)

To get some information on the coronavirus as it is affecting air service, take a look at our latest updates on BoydGroupChina,com. Click here.

There are a couple of insights that a lot of the media have entirely missed.

___________________________

ALL OF US AT BOYD GROUP INTERNATIONAL WISH YOU A GREAT WEEK!

Before We Start This Week:

The advance bookings for the 25th annual Boyd Group International Aviation Forecast Summit are running at a record pace.

This year, our line-up of distinguished aviation executives – each delivering their own vision of the future – will be the most exciting yet. For more information and to register, just click here.

We look forward to seeing you in Cincinnati USA on August 23-25!

_______________________

Today, Issues & Trends To Watch

Thia week, we’re going to take a snapshot look at a number of issues around the aviation industry.

Last A380 Shipset Coming Together – But Airbus Is On A Roll

The final wing assembly for the A380 program is on its way from Northern Ireland to the final assembly operation in France.

Attendees At The IAFS™ Got A Contrarian Forecast. We’d point out that when this technological marvel (which it certainly is) was first announced, and when the first one rolled out of the factory in 2005, Boyd Group International was among the very few research firms that predicted that there would be – at max – global demand for 350 to 400 of these machines, in stark contrast to the 1,000+ predicted by various sources.

The aviation media was generally giddy, with articles predicting how all major airlines all around the globe would be ordering the A380. Our forecasts presented at the annual IAFS back then ran way counter to the “consensus.”

As it turns out, even we were a bit optimistic. At the end of the production, which is scheduled to be around late 2021, there will be 269 A380s produced. Just 14 airlines entered the orderbook, and all but 4 were in Asia or the Middle East.

The Real Story: Airbus Not Missing A Beat. Amid this difficult situation, Airbus has simply moved on, developing the A321 into a world-beating, multi-mission airliner, and has also acquired from Bombardier what is arguably the world’s most performance-advanced airliner platform, the A220. Then take a look at the performance of the A-350Neo.

The A380 may have failed to meet projections… but the rest of the Airbus inventory is more than making up for it.
________________________

New Report: U.S. Airports To Need Scuba Gear By 2100

According to an organization called the World Resources Institute, by 2100, several airports in New York, Florida and California should plan to be waterfront properties, unless, they warned, we act now to curb climate change.

Yessir, there’s nothing like a safe, completely unverifiable forecast. One that predicts something that’s 80 years away, and when it turns out this is another event in a decades-long contest among advocacy groups to out-Cassandra each other, these august and rarely questioned experts will be long gone, without any need to discuss their findings.

Do an internet search. Going back a century you can find these types of predictions galore.

Point to consider. We have a severe intellectual challenge. Anyone, including folks with impeccable professional climatology expertise, who dare to so much as question any aspect of the current narrative on the causes and issues surrounding “climate change” and they are uniformly ignored, or attacked.

But let some oh-so-concerned 16-year-old Swedish kid, Gretta What’s-Her-Name, likely with not much more climate research or expertise beyond knowing how to boil an egg, come out and demand action, and she’s a global hero, with world leaders swooning over her. Who is kidding who?

Message to airports… reducing emissions and getting green is of course a necessary objective. But we’d suggest that Palm Springs not just yet request discretionary funding for a new marina to serve the airport.

___________________

Millions In Technology Brought To Its Knees By A Low-Fat Latte

European aviation regulators have issued instructions to have “liquid free” zones in the cockpits of A-350-900/1000 airliners.

There have been instances where a spill on the center console between the pilots has caused uncommanded engine shutdowns.

So, that means in-seat cockpit coffee breaks may be verboten in the future.

___________________

Breaking!
New Trans-Atlantic – U.S. Service In The Pipeline. Soon.

The mess and total lack of credibility created by the Chinese government in handling the coronavirus epidemic will – write this down – materially affect levels of Chinese air traffic, both domestic and international for the long term.

That, however, should have large, secondary non-hubsite U.S. airports preparing to accommodate more trans-Atlantic service.

Let’s explain:

We are in the process of revising our Airports:China™ forecast, covering the top 200 airports. The initial findings are that total domestic traffic in 2021 will be down at least 30%.

But plan on at least 75% of the pre-epidemic international capacity getting cut. That represents a lot of airplanes – including U.S. and E.U. carriers – suddenly out of the schedule. Over half of the China-international traffic is based on leisure passengers, and that’s a segment that’s heading for the drainpipe, taking with it a lion’s share of the revenue previously supporting long-haul nonstops.

On the Chinese side, that sector will be blocked by concerned countries banning folks from the Middle Kingdom from arriving. Not anybody’s fault but the hubris of the PRC government, which actively covered up the epidemic, and in the process allowed millions infected citizens to travel from Wuhan during the Lunar New Year holiday, spreading the disease across all of China

Regarding inbound traffic to to China, after all that’s come out about the PRC’s handing of the epidemic, not to mention the increased scrutiny of foreigners, the exciting future we saw with our ChinaNiHao Project just four years ago for China-U.S. traffic is gone.

So, on this side of the Atlantic, we have Delta, American and United, stuck with some big airplanes sitting on the ramp, all dressed up with nowhere to go in China. Even more than that, it has left foreign carriers such as Lufthansa and British Airways with excess aircraft, too.

They need to apply this lift somewhere, so look for some unexpected fleet shifts this summer, leading to an accelerated expansion of trans-Atlantic capacity from both major and secondary U.S. airports.

And it won’t just be U.S. airlines, either.

ALL OF US AT BOYD GROUP INTERNATIONAL WISH YOU A PROSPEROUS WEEK AHEAD!

Before We Start This Week…

Southwest Airlines At the IAFS

Andrew Watterson, EVP & Chief Revenue Officer To Participate At the #1 Aviation Event of The Year

The International Aviation Forecast Summit is the event that delivers over-the-horizon perspectives of the future of aviation… perspectives that give our attendees the competitive edge.

This is another reason that the international Aviation Forecast Summit should be a part of your calendar for 2020. This is the event where you get real direction and perspectives from the airline and aviation leaders who will shape the future.

Southwest can be expected to deliver some exciting new dimensions in route and market direction in the second half of 2020. With the expected return of the 737 MAX, it’s an airline that’s ready to bring their brand of service to more places, more often. This is one part of the IAFS not to miss.

Planning Air Service Outreach? Stop shooting in the dark. Make sure you join us in Cincinnati USA on August 23-25. The IAFS is where you get the straight understanding of the strategies of airlines and their market planning… right from the executives making the decisions. This allows our airport attendees to sharpen their outreach efforts, honing them to the real tactical directions of target airlines.

_______________

The Coronavirus

Facing The Air Travel Damage

As noted earlier, initial revisions to Boyd Group International’s Airports:China™ and Airports:USA® forecasts indicated as much as a 75% reduction in China-U.S. air traffic through June.

It’s no longer “as much” – it’s really “at least.”

Nonstops To/From China? – By 4Q, Maybe. The three U.S. airlines operating to points in China have chopped flights through March or April, depending on carrier, and with the mess evolving in the Chinese government response to the epidemic, it is a near lead-pipe cinch these cancellations will be extended.

We are seeing melt-down – justifiably so – in consumer interest in visiting China. The inept and politically-motivated cover-up of this epidemic until just about two weeks ago, and through the start of the super-dense Lunar New Year travel cycle, is an outrage.

When the facts are made clear, the PRC has single-handedly torpedoed what until recently was fixin’ to develop into the most exciting air travel growth situation in history.

The legitimate fear is that this one enormous event is going to make leisure travel to China in the future very unattractive, and travel from China not welcome due to medical uncertainties.

This could be for months, and the reputation of China as a destination damaged for years. Maybe. It will depend on the folks in Beijing.

As of today, our forecasts are predicting at least a 75% reduction in China-U.S. travel for the full year 2020, and at least a 15% decline in domestic air travel in China.

The Background Story Isn’t Going Away. It’s not just the coronavirus. It’s the handling and policies and propaganda that will leave a mark on China as a leisure destination… and as a business destination, too.

Just touching on this, the coronavirus and its propensity to be rapidly spread. was discovered in late December. Doctors and journalists, however, were warned by the PRC government to not “engage in false rumors” in claiming it even existed.

Then, to prove to the people that there was nothing to worry about, the government barely two weeks ago staged a massive community Lunar New Year Celebration of 40,000 families in Wuhan. Even though there were dozens of cases of the virus already reported.

We’re again showing the newspaper headline trumpeting the fun and frivolity of the event on January 18.

It has been ignored in the media, which too much is taking whatever comes out of China as rock-solid dogma.

Right after that, thousands of those that attended this hoedown left town for the traditional holiday migration. That spread the coronavirus across the entire country, as well as to points across the globe.

Newsreels v Reality. Only now, the PRC government, to the delight and kudos of the WHO (of which China is a major member, by the way) and the swooning of some in the media to whom checking facts is unnecessary, is taking firm and “aggressive” action.

They are sending hundreds of doctors to Wuhan to treat the illness. They are, in some cases literally, boarding up people in their homes. They are, according to their groupies in the international media, building hospitals almost overnight.

Wow. Action.

But the question comes up… do those doctors have protective garments? Do they have any sort of face masks? Are those “hospitals” really operative? And how come just several days ago, they were telling the world that Wuhan had adequate facilities?

At one point, the official media proudly showed a picture of the first built-in-days new hospital. Oops. It wasn’t a hospital at all. The picture was actually a photo lifted off of a website of a company advertising modular buildings.

The bottom line for air travel is that the underlying realities of how this situation has been dealt with is not one that’s very encouraging.

It Started Before The Coronavirus. From the very robust growth in travel and trade with China that we saw just four years ago, the entire situation has changed. Even before this epidemic, the fraying China economy was in line to put a big dent in travel to the U.S. Plus, the prior welcome that foreigners experienced in China started to decline, as political realities began to sink in.

How Do You Say “Chutzpah” In Mandarin? Now that the U.S. has implemented quarantine for citizens coming back from China, and has effectively advised Americans not to go there because of the continuing spread of the coronavirus, the PRC government is quite miffed.

They are claiming that such actions are not “friendly.”

Return To “Normal” – There Is No Normal. The PRC government has bungled this situation into what has spread as a health crisis in China, and one expanding to the rest of globe.

Combine this with other pre-epidemic trends and policies that have been implemented in China, such as increased restrictions on foreigners and travel within China, and we unfortunately would conclude that the vision that existed four years ago for China-U.S. travel is now gone.

When this health epidemic winds down (when?) and if there are changes in policies in Beijing in regard to foreigners, a new paradigm for U.S. – China travel will emerge. Maybe stronger than before.

But it is going to depend on actions in China. Not outside.

Before we start with the Monday Update… Announcing!

Jude Bricker – CEO of Sun Country To Present

At The International Aviation Forecast Summit

The International Aviation Forecast Summit is the event that delivers over-the-horizon perspectives of the future of aviation… perspectives that give our attendees the competitive edge.

That competitive edge will be honed further with an incisive session featuring Mr. Jude Bricker, CEO of Sun Country Airlines.

Widening its aviation footprint, Sun Country has announced that in addition to a growing ULCC network, it will be also operating freighters for Amazon. This is a new type of business plan, and one that gives the airline a much wider revenue footprint.

Mr. Bricker joins the exciting line-up of aviation industry leaders that will be delivering their views of the future. At the IAFS, the focus is not on pre-determined “panel discussions,” but on exploring what these executives see ahead.

Standby For Traffic, Fleet & Trend Forecasts, Too. There are a few giant monkey wrenches that might – might – affect air transportation domestically and globally in the coming 36 months, and they’re going to be reviewed at the IAFS. Like, the effects of new-generation, multi-mission narrow-body platforms on airline route planning. The return of the 737 MAX. Plus, a lot of unknown factors… if the current coronavirus epidemic continues to spread in China and globally, airline travel will be materially affected. The IAFS forecast sessions are known for identifying emerging trends.

Special Early Registration Rates. Register now, and take advantage of low New Year registration rates through January 30. If you can attend only one event in 2020, this is the one that delivers information, forecasts and perspectives no other event comes close to.

Click here now, and get a jump on the future!

______________________

China – U.S. Traffic: All Bets Are Off

Matter of Fact, The Casino May Get Shuttered

Occasional cases of the potentially deadly coronavirus are being discovered all over the world, including in the USA.

But it’s now all across China. In a big way.

As it appears now, it is spreading quickly… and is worse than publicly conveyed in China, where there are private videos of folks collapsing in the street, and ambulances taking people to overcrowded hospitals.

As of today, the virus has spread from its start in the city of Wuhan to every province in China.

Official numbers are now indicating over 2,500 cases. Based on the reliability of government actions in China, you would be safe to quintuple that number.

Revisiting Traffic Forecasts

China-US air traffic represents approximately 7.08 million annual O&D.

Or, at least that’s what it was forecast to be in 2020, until now. Airports:USA® and Airports:China™ data are now being revised to reflect the expected effects on U.S.- China air traffic.

They are not comforting and they may not be short term.

As of today, and depending on the developments in China, between January and June, we are forecasting at least a 75% drop in passenger traffic between the USA and China. Severe, but based on current understanding of the situation in China, it may even be optimistic.

When the real facts are known about this virus, and how it is spreading, nobody awake and sober is considering a leisure trip to anywhere in the Middle Kingdom.

PRC government is massively and belatedly trying now to deter travel within the country, even up to the point of putting up roadblocks between provinces.

As a preventative measure, it’s a lost cause, due to their inaction and attempts in the early stages to deny the outbreak. We’ll touch on that later.

Millions of people have skidaddled out of Wuhan, the epicenter of the outbreak, long before the government’s attempts to prevent such movements, and long after the government knew about the virus.

On one hand, it is Spring Festival, the Lunar New Year, when travel in China represents the biggest human migration on earth. Trains are packed, busses, too. Airports are crowded. A perfect situation to quickly spread a contagious disease.

On the other hand, there were lots of people in Wuhan aware of the expansion of the coronavirus, and they wanted to get out of Dodge, too.

Some Preliminary Traffic Numbers

At least for the next six months, flights between China and the USA are going to be financial disasters.

And some U.S. gateways are going to take some hits, too.

As of today, the Airports:USA® forecast for SFO indicates a loss of at least 344,000 O&D through June, as a result of the expected collapse of traffic to and from China.

At LAX, the estimate is 702,000 O&D reduction. Not lethal to LAWA, but still a significant financial bang.

Air Service Cuts Inevitable

Furthermore, we can expect to see Chinese carriers quickly cut flying to the U.S. – on a “temporary basis.”  In particular, service to any second-tier Chinese destination is likely on the near-term chopping block.

We can even expect to see a couple of Chinese carriers drop out of the U.S. market. One to watch is Hainan, whose load factors are almost uniformly below the 83% China-US average.

#1 Preventative Measure – Stay Away

Already, US carriers are taking precautions. One airline has issued masks to flight attendants on flights to and from China.

Sounds great… except the paper masks we see people wearing across China don’t do diddly to prevent spread of disease. They do a great job of keeping the wearer from drooling on other people, but viruses can get in easily.

The masks that do have some effect – called N95 respiratory masks – are only effective when worn constantly, are not removed and only for short periods. The point is that in any close quarters, the coronavirus can be transmitted.

Oh, and you probably can’t buy N95 masks, anyway. Take a look on Amazon… in just about all cases they are “temporarily unavailable” – speculators have scooped them up, probably.

Actually, U.S. carriers may have to completely re-think China flying for the near term. Beijing and Shanghai are no longer outside of the reach of the coronavirus.

Out of Control. Because Denial Was The First Step

A little context to this situation…

The coronavirus now spreading across China – and maybe the globe – is believed to have started in a typical and filthy “wet market” in Wuhan, which is a large city in central China.

A wet market is a place where all sorts of food – meat, fish, birds, snakes, poultry are sold under incredibly unhygienic conditions. No refrigeration. Meat sitting out all day, pawed by vendors that don’t wash hands, and by shoppers. Flies and other insects are rampant.

Some misguided folks have lauded China for taking “quick action” to contain the virus. Flat wrong. The first actions were apparently to try to make it appear that there was no problem, and only when the virus started to appear around China from people traveling, did government entities “take action.”

One example is the grand neighborhood Spring Festival meal that was put on for over 100,000 people, all partaking together of a huge communal repast. To show that there was no problem, it was right in Wuhan, and only four miles from the place the epidemic was generated.

Worse, it was held days after the epidemic was known and was spreading.  There were at the time 56 reported cases of the disease – and, being “official” data, you can at least double the number.

But the people in charge did not want the news of the potential virus to get out. So they covered it with big news on events such as the 40,000 families attending a shindig. Epidemic? What epidemic?

Later, the decision was made to quarantine all of Wuhan. Close the airport, cancel the trains, shut down the bus systems. Great. But they gave the populace 8 hours of warning first. Exodus to the rest of China, and quick.

Bottom line: The growth in China-U.S. traffic is on hold – how long will depend on how much this epidemic expands in China and globally.

A virus loves to have people in close quarters.

That defines an airplane cabin. Threat noted.