China’s regulator has ‘suggested’ to the nation’s airlines that they either cancel or delay delivery of existing aircraft orders.
A number of cancellations, negotiated delays and simple airline collapses have already shortened the delivery list for next year. And things are unlikely to improve quickly, with credit constraints adding to the airlines’ reluctance to expand capacity.
As IATA’s Director General and CEO, Giovanni Bisignani, observed this week: ‘The financial market is not very keen on financing those kinds of operations. There will be a reduction in deliveries not just because of the fall in demand but also because of the lack of financing.’
Recent domestic air traffic data have been relatively positive, as growth returned quickly in October and November months.
But international growth is still very much in negative territory.
The last thing that domestic airlines want right now is more seats. Most are in perilous financial state, a situation which has deteriorated alarmingly in the past quarter. China Eastern in particular is trading with effectively no equity.
Source: Centre for Pacific Aviation