Airbus Restarts A320 Assembly in China as Virus Hits Airlines

Airbus Restarts A320 Assembly in China as Virus Hits Airlines

Airbus has restarted operations at its A320neo final assembly line in Tianjin, China. In statement issued on February 11, the company said that its Airbus China division has been authorized by the Chinese government to “gradually increase production, whilst implementing all required health and safety measures for Airbus employees, which remains the top priority.”

The Europe-based manufacturer said that it is “constantly evaluating the situation and monitoring any potential knock-on effects to production and deliveries and will try to mitigate via alternative plans where necessary.”

The Tianjin factory in southern China makes six A320 aircraft each month, accounting for almost 10 percent of global production for the single-aisle family.

Other Western aerospace groups have yet to confirm the extent to which their Chinese operations are resuming in response to central government instructions to partly relax the shutdown on business activity across large parts of the country.

Work at Boeing’s Zhoushan completion and delivery center has long been on hold due to the ongoing suspension of 737 Max airliner production. The company, which has three subsidiaries, four joint ventures, and more than 35 direct suppliers in China, last week said that, in response to government guidance, it is, “working through plans to delay office openings, provide masks, and offering informational briefings and facilitate work from home options when available.”

Safran said that it extended the Chinese New Year break at its Chinese facilities until February 10. The France-based group has extensive manufacturing and maintenance operations in the country, employing around 2,500 people at 20 different entities.

According to air transport data consultancy OAG, the scale of the rapid reduction in airline seat capacity is already the most significant ever recorded for one country in a relatively short period of time. On February 10, the company reported that the response to the outbreak has resulted in the cancellation of two-thirds of international capacity to and from China. Since January 20, around 1.4 million seats have been cut from scheduled airline capacity, which amounts to more than all of the scheduled international capacity planned for France this week.

The latest OAG data also revealed the extent to which cuts to airline capacity have impacted other countries, with Thailand seeing the biggest drop in traffic from China at 63 percent. Among the top 10 for connections to China, other countries that have taken a hit include Japan (60.1 percent), Taiwan (62.7 percent), South Korea (54.4 percent), Russia (48.1 percent), Canada (46.4 percent), and France 42.1 percent). Hong Kong alone saw an 80.3 percent drop in traffic from mainland China, while capacity out of Indonesia fell by 92 percent, followed by Singapore (89 percent) and the U.S. (86 percent).

“Our expectation is that international capacity from China may again fall over the next few days but that we have seen the worst of the cuts with airlines having responded quickly to the virus,” said OAG analyst John Grant. “Ultimately, we know from previous events of this nature that capacity and demand will return quickly, but the numbers are certainly some of the most dramatic we have seen in any market.”

Aviation analytics company Cirium has tried to generate a more complete snapshot of flight activity by tracking the number of services that were scheduled but never flew. Between January 23 and February 11, just over one-third of all scheduled domestic and international flights in and out of China did not operate. This involved the loss of 85,568 flights, compared with just 4,681 in the same period in 2019.

Even allowing for the fact that most airlines have rapidly scaled back their scaled flights, most of the main Chinese carriers ended up not operating between around 10 and 20 percent of their movements during this period. Looking ahead to airline schedules running through February 29, there are expected to be 24.2 percent fewer domestic Chinese flights than had been projected as recently as February 3, and 23.4 percent fewer international flights. 

According to Cirium, the most significant decline in both planned flights, and the number of planned flights that did not operate, only began from around February 1 when the scale of the health crisis became more widely understood outside China and as travel restrictions began to take effect. As of the end of December, scheduled flights into and within China had been expected to be around 8 percent higher this year than in 2019.

Cirium reported that China accounts for around 16 percent of global airline capacity and that if the current trend continues this is likely to drop by 8 percent. “Coronavirus has the potential to fundamentally impair 2020's global airline capacity growth,” concluded analyst Henk Ombelet.

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