As of 1 May 2020 over 60% of the global fleet was in storage and utilization levels for Europe were 95% down on the previous year. Nobody could have predicted today’s reality and as an industry we are working together to make intelligent decisions that enable the rebuild and recovery of the market. At Cirium, we believe these three top tips will help you to structure your planning and importantly stay one step ahead of the curve.
Monitor daily changes in the stored fleet
We are classifying the status of the global fleet according to two scenarios. The first was the shut-down phase, which we believe concluded on 21st April 2020 by when over 65% – or 16,500 passenger jets – were classified by Cirium as in-storage. The second is the ongoing ‘hibernation phase’, during which we classify an aircraft being in storage if it has not operated a cycle for 14 days. At 7th May our figures showed that 61% of the global passenger jet fleet remained in-storage. On the positive side, while the in-service fleet has stabilised at approximately 10,300 in recent days, we continue to record increasing aircraft utilization trends in seven-day tracking data. Viewing these data points daily will help you to prepare for the rebuild and ultimately recovery scenarios. It will allow you to monitor changes in the fleet by airline and accurately see which aircraft enter back into service and which enter retirement or remain in storage.
Understand variances between the planned schedule and actual flights flown
Rob Morris, Global Head of Consultancy at Ascend by Cirium, stated on the 7th May that: “Approximately, one fifth of the revised global schedule is being cancelled on a near-term basis, often the day before, as airlines try to plan for recovery amid substantial demand uncertainty.” Cirium’s tracking data recorded flights by a total of 4,138 single-aisle aircraft on 1st May, compared with 13,934 on 3rd January. Therefore, it is important to recognize that the schedule should only be used as a guide. During this crisis it is most effective to merge the schedule information with the actual flight status data to ascertain a true picture of the market.
The above visualisation from Cirium shows the the Chinese domestic market aviation trends and activity as a sample of the coronavirus impact (COVID-19).
Plan to rebuild for tomorrow’s world
With IATA’s prediction for a 48% fall in traffic this year having sent shock waves across the industry, Rob Morris shared his expert view on the new outlook for the industry, including the prospect that at least seven years of passenger growth could be wiped out.
This seismic shift from IATA’s original forecast growth of 4.7% presents unprecedented challenges. We would require 100% compound growth to get back to 2019 levels of passenger traffic. Growth of 10-30% will only see us return to the traffic levels of 2014.
Furthermore, the current demand scenario will likely result in premature retirements, particularly for stored widebody aircraft built between 2001 and 2005, such as Airbus A340s and Boeing 777s.
In addition, there are more than 2,000 stored aircraft built in or before the year 2000. These jets may never return to service or could get a second lease of life, albeit as converted freighter aircraft.
In the short term it is difficult to suggest what the aviation landscape will look like in 2021. One thing is for sure though – stakeholders will need to closely monitor both the supply and demand sides of the industry.
If you are monitoring the market daily, you should consider Cirium’s new ‘Monitor the Market during Covid-19’ report, produced by our team of award winning Ascend by Cirium Consultants.