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COVID-19'S BILLION $$$$$$$ BILL Vol. 27 No. 3 April 2020 orientaviation.com COVID-19’s BILLION $$$$$$$ BILL Region’s carriers top US$90 billion in losses as borders stay shut IATA boss predicts U-shaped recovery from coronavirus pandemic WE’VE GOT YOU COVERED! 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[email protected] | +1 561.349.8950 | www.willislease.com CONTENTS Volume 27, Issue 3 COVER STORY 8 COVID-19’S ORIENT AVIATION MEDIA GROUP BILLION 17/F Hang Wai Commercial Building, 231-233 Queen’s Road East, $$$$$ BILL Wanchai, Hong Kong Editorial (852) 2865 1013 Region’s carriers top E-mail: [email protected] Website: www.orientaviation.com $90 billion in losses Mailing address: as borders stay shut GPO Box 11435 Hong Kong Publisher & Editor-in-Chief Christine McGee E-mail: [email protected] Associate Editor & Chief Correspondent Tom Ballantyne Tel: (612) 9638 6895 Fax: (612) 9684 2776 E-mail: [email protected] North Asia Correspondent Geoffrey Tudor Tel: (813) 3373 8368 COMMENT 15 Note to customers: Aircraft park up spaces full E-mail: [email protected] 5 COVID-19 exposes Asia-Pacific’s vulnerable until further notice carriers to closure 16 Airports and ATM operators are unavoidable Photographers Rob Finlayson, Graham Uden, casualties of COVID; make case for inclusion in Ryan Peters ADDENDUM government rescue packages 6 Game set and match to Walter Cho in battle with Chief Designer “nut rage” elder sister for leadership of Hanjin Chan Ping Kwan Group and Korean Air Printing 6 IATA puts AGM and world transport summit on Printing Station(2008) hold until post the northern summer ADMINISTRATION ORIENT AVIATION COVID-19 SPECIAL REPORT General Manager 8 IATA predicts U-shaped recovery for the INDUSTRY ADDENDUM Shirley Ho global airline industry and fears recession, the TECHNOLOGY E-mail: [email protected] association’s director general and CEO tells 18 All Nippon Airways parent, ANA HOLDINGS, Orient Aviation introduces its avatar company ADVERTISING MRO & COMPONENTS 18 HAECO GROUP equipped for 787 land gear MRO, Asia-Pacific, Europe & Middle East acquires Jet Engine Solutions in the U.S. Defne Alpay Tel: +44 7712 829859 E-mail: [email protected] The Americas / Canada Barnes Media Associates Ray Barnes Tel: +1 434 770 4108 Fax: +1 434 927 5101 E-mail: [email protected] [email protected] 10 Asia-Pacific carriers bear brunt of COVID-19 18 AAR and Sumitomo Corporation partner in Download our 2020 media planner at: 12 Who will survive the network carnage? Capacity aftermarket supply chain venture orientaviation.com/advertising bloodbath not yet stemmed PEOPLE Follow us on Twitter @orientaviation 14 Cheaper oil prices negated by scale of COVID-19 18 Mainland-controlled Acro Seating names new crisis CEO APRIL 2020 / ORIENT AVIATION / 3 At Brussels Airport you are in good company. 26 million passengers use Brussels Airport as their gateway to Europe, and for good reason: 67 airlines connect Brussels to 212 destinations. Make Brussels Airport your gateway to Belgium and Europe. COMMENT Making it to the other side International Air Transport Association director general Some countries in our region have been quick in and CEO, Alexandre de Juniac, says for airlines COVID-19 is delivering multi-billion dollar rescue packages to airports apocalypse now. It is not an exaggerated description of the and airlines to help them survive the crisis. Others, so far, situation given the damage the pandemic is wreaking on the have not. global industry. Several Asia-Pacific carriers will emerge from the For airlines, the revenue black hole, and only if the crisis pandemic bloodied but back in the skies. The same cannot passes in three months, is estimated at US$252 billion. The be said for a large number of the region’s LLCs. They Asia-Pacific component of that bill is $90 billion and climbing. operate on wafer thin margins. Most are privately-owned With no relief in sight from the worldwide travel bans – so they don’t necessarily have the support of governments and no timetable for lifting border prohibitions for foreign – although a handful does. Many of them are on the way to travelers into most countries across the globe – the impact being casualties of the pandemic. So too are some of the of the 9/11 terror attack, SARS (2003-2004) and the Global region’s once celebrated full-service carriers. Financial Crisis (2008) pales into insignificance compared At such a dire time, airline, airport and air traffic with the present calamity. management bodies are urging collective action to keep No-one has dared predict when the blight of COVID-19 the skies safe. Even now, there are more than 5,000 aircraft will recede. In the past, airlines have bounced back relatively flying every day due mainly to air freight demand for medical quickly from such setbacks but this time around the recovery supplies from every day masks to hi-tech monitoring and is predicted to take longer and be U-shaped, de Juniac told resuscitation equipment. Orient Aviation earlier this month. In such extreme circumstances, is it unreasonable for What we do know is the industry post COVID-19 will be governments to provide aviation with holidays on fees and different. In the Asia-Pacific, not every carrier flying before charges and loans to help airlines keep flying in an industry the virus outbreak will be flying beyond it. critical to a globally connected world? ■ TOM BALLANTYNE Associate editor and chief correspondent Orient Aviation Media Group The most trusted source of Asia-Pacific commercial aviation news and analysis ORIENT AVIATION ORIENT AVIATION CHINA “It has established itself as the primary source of information on industry topics in the Asia-Pacific region” APRIL 2020 / ORIENT AVIATION / 5 ADDENDUM Game set and match to KAL’s Walter Cho in leadership battle with siblings The long and often bitter family At the AGM in the final week from COVID-19, he continued. battle for management control of last month, Walter secured the “The whole world is suffering of Korean conglomerate, Hanjin votes of 56% of shareholders. greatly due to the COVID-19 crisis. Group, and its flagship company, Around 43% opposed his The airline industry, in particular, Korean Air (KAL), is over, at least reappointment. Despite is facing an unprecedented crisis,” for the time being. the COVID-19 crisis, 3,619 he said. Incumbent Hanjin Group shareholders participated in the “More than 90% of Korean chairman and KAL president, regular shareholder meeting, with Air’s aircraft are grounded. All of Cho Won-tae, or Walter Cho, around 100 physically present at us at Hanjin Group are devoting convincingly defeated his sister, the gathering in the Hanjin Group our efforts to overcoming the Cho Hyun-ah, in a shareholder headquarters in Seoul. Neither crisis. We will take the necessary vote at the chaebol’s annual Walter nor his sister attended. self-help measures to improve our general meeting. The elder Cho, resulted in a five-month jail term In a statement following his financial structure. widely known as Heather Cho, for Cho, shone more intense re-election, Walter expressed “In addition to the previously had tried to remove her brother as media light on a simmering battle his “sincerest gratitude to all the announced sale of idle assets, we chairman, assisted by the support between the siblings for control of shareholders of Hanjin KAL for will actively seek to raise funds by of a coalition of critics of the Hanjin Group as the health of their helping us successfully complete consulting the board of directors. conglomerate. father, Cho Yang-ho, the long-time the seventh annual general As the crisis we are facing cannot Well known in Korea, she chief of the conglomerate, was meeting of shareholders”. be overcome by the efforts of achieved orbital infamy after a failing. Cho senior died, aged 70, “The meeting served as a single company or industry, “nut rage” incident in December in a California hospital a year ago. an opportunity to hear the we earnestly ask for the strong 2014 when she forced a KAL jet, Walter took control of the voices of various shareholders support of the government. taxi-ing to take-off, to return to the Hanjin Group in the months after and employees and will act as “As a national flag carrier gate because she was unhappy his father’s death, which infuriated a stepping stone in the future representing Korea, Korean Air with the way she was served nuts Heather. In retaliation, she forged development and growth of will take the initiative to overcome in first class. She wanted to offload a third party alliance with sufficient Hanjin Group. Hanjin Group will the current crisis. I will take the the offending flight attendant from other shareholders in an attempt to now start afresh, respecting the lead and do everything I can. The the flight. topple Walter and his management wishes of the people,” he said. COVID-19 crisis will soon pass and The incident, which eventually team from power.
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