We continue to monitor scheduled capacity from airlines around the world. The industry continues its path to recovery as the number of seats increase slightly — but growth is not gaining any momentum yet.

The total number of seats scheduled for the current week is 40.2 million. This is up more than 10 million from the lowest point the industry reached in the beginning of May – 30.8 million. Still, the average growth rate for last few weeks is 3.6% a week, so the industry will not rise quickly without gaining momentum on different continents.

We continue to monitor the data from the ch-aviation capacities module.

Asia is the region for optimism, but the last 4 weeks of variation in capacity there shows the recovery is far from “V” shape. There are 22.9 million seats scheduled to depart in Asia this week – less than it was 4 weeks before. The market remains almost half the size what we consider to be “normal.”

Half of the seats in Asia currently are scheduled in China, which is driving all the region’s market growth. After the constant growth of domestic seats from China, this week we see a drop in scheduled capacity mainly due to new limitations introduced for flights from Beijing after number of COVID-19 cases increased.

Airlines in North America are growing capacity week by week. After the month of May, which remained almost flat with record-bottom numbers, now airlines changed their path and are adding more flights every week. The market now stands at 9.4 million scheduled seats.

In Europe, we noticed a few times in our previous analysis that the airlines were too optimistic for the month of June. Airlines waited for the last minute to remove flights from their schedules for June and now we see quite a significant drop. With constant growth every week in June with more capacity added, we are curious how the development in July will look like. Europe is the most seasonal market in the world so July-August summer peak will show the market demand pattern.

The capacity trends in the three smaller regions (South America, Africa and Oceania) are similar – the bottom is found and, as of now, it stays there. Airlines in South America now have just 11% of seats scheduled compared to the middle of March. This region as of now is the most heavily impacted by the COVID-19 crisis.

Africa got a slight decrease in scheduled seats. The region is not showing any signs in traffic recovery based on scheduled capacity and still stays at low levels.

There is more recovery visible in Oceania, compared to other (relatively) small regions of Africa and South America. Airlines jumped over the half-million scheduled seats mark, mainly driven by domestic market recovery. Compared to the summer peak kicking in Europe and North America, winter just started in this part of the world, making recovery even more difficult.

We will continue to monitor the situation on capacities and will post on our blog. Follow us here and follow our #chaviationcovid19updates on Linkedin.

At ch-aviation we are tracking new aircraft deliveries of the largest aircraft manufacturers: Airbus, Boeing, Bombardier, COMAC, De Havilland, Embraer and Irkut.

New aircraft deliveries almost dried up in April, when we saw just 15 aircraft delivered by all manufacturers. In May, there was a small sign of recovery – 19 brand-new aircraft were delivered globally.

Still, the impact of Coronavirus/COVID-19 pandemic remain significant. Last year there were 133 aircraft delivered in the month of May.

We saw the first signs of aircraft deliveries being hit in February:

The first two months are usually slower for the airlines, but March to June usually is a very busy stretch both for manufacturers and airlines. With the COVID-19 pandemic we saw new aircraft deliveries went down, but the month of May was slightly better than April for manufacturers.

Boeing deliveries last spring were hit by the grounding of Boeing 737MAX aircraft, but that now looks like a breeze for Boeing compared to this year’s numbers. Boeing deliveries went even further down in May – the U.S. manufacturer delivered just 3 new aircraft. Boeing hasn’t delivered any aircraft in passenger configuration – 2 777s for “China Southern Airlines” and 1 B767-300 for “UPS Airlines” were delivered as freighters.

Airbus in February still had a quite positive month with more deliveries than the year before (mainly due to more Airbus A220 deliveries). When the global pandemic spread, new aircraft deliveries by the European manufacturer went downhill, but May brought some optimism. Airbus delivered 15 new aircraft to its customers, including a of types and airlines – from the smallest (A220-300 for “Air Canada”) to the largest (A350-1000 for “British Airways”).

When looking at grounded fleets and capacity developments toward recovery we see China, Hong Kong and Macao far ahead. The same goes with new aircraft deliveries.

The number of new deliveries in China, Hong Kong and Macao stopped when the region entered COVID-19. There were no new aircraft deliveries to airlines in China, Hong Kong and Macao in February. There was one delivery each month in March and April 2020, but the month of May brought some optimism: airlines accepted 6 aircraft during the month. It is less than half what manufacturers delivered the same month of last year, but it is some sign of recovery. It is important to note half of the deliveries were taken by “China Southern Airlines” which took 2 777-200Fs from “Boeing” and one A320NEO from “Airbus”.

Asia is an important region for the new aircraft deliveries – 42% of all deliveries went to this continent in 2019.

We used ch-aviation fleets advanced for this analysis.

Follow our blog and our LinkedIn page for the latest data extracts on #chaviationcovid19updates.

Earlier this year ch-aviation teamed up with Collateral Verifications to provide aircraft valuation data for ch-aviation fleets ownership subscribers. With the latest update, we analysed the trends of aircraft value data by aircraft type.

“Collateral Verifications” valuation methodology and approach during covid-10 crisis for market values:

1. During the initial period of this crisis, it has been and will be difficult to ascertain the current value trends based on the lack of available transaction data points to review for both new and used aircraft. It is also our understanding that many of the transactions taking place had already been in work prior to the crisis and may not be reflective of the current market conditions.

2. In order to capture some of the aircraft valuation trends, there are factors that can be analysed to provide certain indications of the potential value declines for each aircraft type.
a. Pricing adjustments for aircraft listed as available for sale and/or lease
b. Airline Credit Risk
c. Monthly Lease Rate Changes
d. Residual Value Adjustments

3. As many financial institutions and investors use these factors to determine the overall lease-encumbered value of an aircraft, these can also be used as indicators to determine the potential adjustments to aircraft values in the current environment.

4. As more trading data becomes available, these value trends will continue to be verified and adjusted as needed to ensure that our values reflect the current market conditions.

At least, there’s a trend of recovery instead of further groundings.

Current Market Value Trends

We see that the average aircraft monitored by Collateral Verifications saw an 11% value reduction since the beginning of 2020. This is a significant drop in aircraft values during this unprecedented crisis for the industry. We saw up to 59% of the total commercial aircraft being grounded during the peak of this pandemic at the end of April.

We looked at what aircraft types and build years had the highest adjustments in values. Values of these aircraft reduced the most post-covid19 compared pre-crisis and the current levels. These aircraft types lost a quarter of their value since the beginning of 2020:

Manufacturer Model Post Crisis Adjustment
Boeing 717-200 Up to -32%
Boeing 737-300 Up to -25%
Boeing 737-400 Up to -25%
Boeing 737-500 Up to -26%
Boeing 737-800 Up to -27%
Boeing 737-900 Up to -30%
Boeing 767-300(ER) Up to -27%
Airbus A320-200 Up to -30%
Airbus A330-300 Up to -29%
Airbus A380-800 Up to -27%

We grouped the aircraft types and checked types that lost 15% or more of their value and compared to aircraft groundings during the pandemic based on ch-aviation fleets advanced data:

Model Build Year Avg. Value adjustment No of aircraft in the market % grounded
717-200 1999-2006 -32% 142 52%
737-500 1989-1999 -26% 151 62%
737-400 1989-1999 -25% 140 77%
737-300 1984-1999 -24% 214 70%
737-900 2001-2008 -22% 52 62%
A330-300 1993-2020 -22% 680 52%
A380-800 2007-2019 -22% 230 98%
737-800 1998-2019 -18% 4823 49%
777-300(ER) 2007-2020 -18% 812 30%
A319-100 1996-2019 -18% 1217 58%
ERJ-135LR/ER 1999-2008 -18% 89 55%
767-300(ER) 1986-2013 -17% 341 65%
777-300 1997-2006 -17% 51 66%
A320-200 1994-2020 -16% 4126 64%

The Boeing 717-200 is the most affected type, losing almost one-third of its value during this crisis.

Boeing 737 Classics also lost a significant part of their values. B737-300s, B737-400s and B737-500s lost about quarter of their value.

Boeing 737NGs also made the list. Boeing 737-800s lost 18% of value during the pandemic, but the valuation dropped differently by the age of aircraft. Early builds of Boeing 737-800s manufactured from 1998 to 2000 lost about 27% of their value, while new builds (2016 and beyond) lost only about 12%. Boeing 737-900s lost 22% of average value while newer Boeing 737-900(ER)s lost 15%. Looking at the values on a timeline, we see older aircraft losing more compared to the latest builds of 737-900ER – a similar trend as its smaller brother, the 737-800.

Airbus A380-800s lost 22% on average, with late builds losing more than early builds (in %). The 380 as an aircraft type lost the most in absolute numbers (millions of dollars).

Similar trends apply to B767-300(ER)s, where aircraft manufactured from 1986 to 1996 lost 27% while builds in 2008-2009 lost just 5.5% of value.

Airbus A320 family values differ based on the equipment type. A319s lost 18% of their value, while A320s lost 17% and A321s lost 14% on average. What do A319s and A320s have in common? The oldest and youngest aircraft lost less, while aircraft produced between 2005 and 2015 lost the most. Looking at Airbus A321s, older manufactured units lost more value while newer ones lost less.

Boeing 777-300s saw a 17% reduction in values, while its younger brother, the 777-300(ER), lost even more – 18%. Looking at the values of 777-300(ER) we see aircraft built 2003-2004 and 2013-2016 lost more than 20% while aircraft manufactured in other periods lost less.

ERJ-135 values decreased by 18%. Older builds lost more while the very latest manufactured units in 2008 lost just 9% of their value.

We also looked at the brand-new aircraft list. Aircraft of these types lost 10% or more when manufactured in 2020:

Manufacturer Equip Type Post Crisis Adjustment
Airbus A380-800 -24%
Bombardier CRJ-900ER -13%
Boeing 777-300(ER) -13%
Airbus A330-300 -11%
Airbus A330-200 -11%
Embraer Embraer 190E2 -10%
Embraer Embraer 195E2 -10%
Airbus A220-100 -10%
Airbus A220-300 -10%

Did all aircraft types lose value during covid-19? No!

The following aircraft types received positive adjustment in the post-covid19 world:

Manufacturer Equip Type Build Year Post Crisis % Adj.
Boeing 747-8F 2020 +13,6%
Boeing 767-300F 2012-2018 +10,1%
Boeing 747-8F 2018-2019 +6,5%
Boeing 767-300F 2009-2011 +6,5%
Boeing 747-8F 2017 +5,4%
Boeing 767-300F 2008 +4,2%
Boeing 747-8F 2016 +3,1%
Boeing 737-300F 1984-1999 +2,9%
Boeing 737-400F 1988-1999 +2,9%
Boeing 747-8F 2015 +2,1%
Boeing 747-8F 2014 +1,0%
Airbus A330-200F 2020 +0,5%
Boeing 777-200F 2020 +0,5%

What do these types have in common? They all have an F in the end, which means it is designed to carry freight, not passengers.

ch-aviation fleets ownership subscribers have instant access to aircraft valuation data with current market values and market lease rates provided tail by tail for a wide range of commercial aircraft from 30-seat turboprops to the Airbus A380. ch-aviation also provides total values of the owned fleet for airlines or total value of lessor portfolios.

55% of fleets grounded in the beginning of April.
59% of fleets grounded at the end of April.
57% of fleets grounded at the beginning May.
55% of fleets grounded the end of May.
54% of fleets grounded in the beginning of June.

We continue to see the path to recovery, even at a slow pace. We analysed the fleets advanced data and we now see 54% of fleets are grounded worldwide. That’s 1 percentage-point less than the analysis we did two weeks ago.

This trend also confirms what we see in airlines’ scheduled capacities. We saw during the last two weeks that airlines re-activated 1,117 aircraft – almost 80 aircraft per day on average.

The number of aircraft grounded does not fully represent the full picture as many airlines reduce utilisation to a minimum to avoid storing aircraft.

More than half of re-activated aircraft have returned to the skies in Asia. Airlines took 583 aircraft back from storage or maintenance, representing a 3% improvement. Asia remains the leading region in this recovery. From 52% of the groundings in the beginning of April, 50% at the end of April, 48% in the beginning of May, and 45% at the end of May, now it’s recovered to 42% of the fleets grounded in the region.

North America and Europe tried to catch up with the recovery trend. Both regions returned more aircraft to the service in last two weeks: North America has 276 fewer units in storage than two weeks ago while Europe saw 158 fewer aircraft on the ground.

Active Total %, grounded
Africa 489 1,569 69%
Asia 6,539 11,367 42%
Europe 2,421 8,283 71%
North America 5,268 10,125 48%
Oceania 479 957 50%
South America 450 1,461 69%

This week we also looked more closely at the percentage of groundings by country. Here are the TOP10 countries around the world with the highest percentage of active aircraft. We excluded countries with less than 10 aircraft registered in the country.

We see large markets like China, Japan and Vietnam being in this TOP10 list — these countries are helping Asia be one of the most active regions these days.

Active Total %, active
Seychelles 10 12 83%
China 3,353 4,152 81%
Taiwan (Province of China) 184 233 79%
New Caledonia 10 13 77%
Congo (the Democratic Republic of the) 31 41 76%
Japan 530 742 71%
Papua New Guinea 42 60 70%
Vietnam 161 237 68%
Myanmar 32 49 65%
Brunei Darussalam 11 17 65%

We also looked at the TOP10 countries with the highest percentage of grounded fleets by airline. We see the recovery levels vary in different countries. All TOP10 countries with the highest number of aircraft grounded have less than 20% of aircraft in the skies (while leading markets now have less than 20% of aircraft left grounded).

We see Austria “leading” this list negatively with only 10 aircraft being active from 297 aircraft total registered in the country. This may be explained by the TOP3 largest carriers in the country (easyJet Europe, Austrian and LAUDA) are not operating as of the date of this analysis. Positively, all three are planning return to service in June, so the future is strongly optimistic.

Active Total %, active
Austria 10 297 3%
Panama 12 124 10%
Oman 11 80 14%
South Africa 35 254 14%
Turkey 87 618 14%
Poland 34 194 18%
Malta 38 213 18%
Nigeria 24 134 18%
Libya 12 62 19%
Portugal 29 148 20%

We use ch-aviation fleets advanced data for this analysis. Our fleet team works to deliver the latest updates on airline commercial fleets globally.

We continue to monitor scheduled capacity from airlines around the world. The industry continues its path to recovery as the number of seats increase worldwide.

The total number of seats scheduled for the first week of June is 37 million. That is 2.1 million more than the week before. The average growth rate for the last four weeks now stands at 4.7%, but the path is bumpy, with varied paces each week and on different continents.

We continue to monitor the data from the ch-aviation capacities module.

Still, the graph of capacity scheduled for the week (as compiled just before each week starts) shows the industry being way less than a half of what it was before the COVID-19 crisis reached the western world:

When we try to predict what will happen in Europe or North America, we need to look to Asia – the region with the tendency to be few weeks ahead of the rest of the world. Last week we noticed a slight decrease in the number of seats schedued, but this week we see this may be just a slight short-term bump. There are more than 24 million seats scheduled in Asia for this week – the market is now more than half of the size what we consider to be “normal.” Still, the question of what is the “new normal” remains unanswered.

Half of the seats in Asia currently are scheduled in China, which is driving all the region’s market growth. We see some developments on international routes from China too as this remains a very small market – this week there are 182,000 international seats scheduled to depart China.

Airlines in North America have finally made a jump in scheduled capacity. May remained almost flat with record-bottom numbers while the first week of June saw a 23% jump in scheduled capacity compared to the last week of May. If the scheduled weekly capacity varied around the 6-million mark for all the month of May, June started with 7.5 million seats scheduled to the depart in the first week. Airlines as of June 1 had another increase of 1 million seats for the second week of June, but we will see if this capacity will stay.

In Europe, we noticed a few times in our previous analysis that the airlines were too optimistic for the month of June. Airlines waited for the last minute to remove flights from their schedules for June and now we see quite a significant drop. One of the airlines being Ryanair, which removed 99% of its flying in June. When looking forward, we see quite significant increases of scheduled capacity for the second part of June – this again shows an optimism of airlines’ belief of returning demand immediately after governmental restrictions are lifted.

The capacity trends in the three smaller regions (South America, Africa and Oceania) are very similar – the bottom is found, but as of now, it stays there. Airlines are still not growing the scheduled capacity or are doing so really slowly. The capacity in South America went slightly down compared to the previous week. There are 572,000 seats scheduled to the depart the continent when the “normal” level would be 10 times higher.

Similar to South America, Africa also got a very slight decrease in scheduled seats. Still, the total drop from “normal” levels are relatively smaller in this region – the industry stays at 20% of the scheduled capacity.

There is a very small pace of growth in Oceania. Airlines has 438,000 seats scheduled for the current week. Our outlook for the future shows that airlines also do not plan growth for further weeks – half a million seats is most likely the maximum of what this region can get in June. Compared to the summer peak kicking in Europe and North America, winter just started in this part of the world, making recovery even more difficult.

We will continue to monitor the situation on capacities and will post on our blog. Follow us here and follow our #chaviationcovid19updates on Linkedin.

We continue to monitor scheduled capacity from airlines around the world. This week we decided to look at the capacity numbers in a little different way. After closing the month of May and waiting on schedules for June to be prepared by the airlines, we looked at other developments during this crisis.

We believe the industry has reached the bottom and now see that recovery has begun. Our latest update on grounded fleets confirms that — by looking at what scheduled airline capacities looked like when COVID-19 reached the western world and what’s happened weekly since then.

The size of capacity for the current week (May 25-31) is 34.9 million seats – that is 1 million more than the previous week and 3.5 million more than two weeks ago. The growth of scheduled seats for the current week was 3% last week – so it will take many months to recover at that pace.

We continue to monitor the data from the ch-aviation capacities module.

Still, the graph of the capacity scheduled for the week (as taken just before each week starts) shows the capacity is growing slightly worldwide:

The largest market, Asia, showed recovery since the end of April, but the slight reduction last week illustrates that recovery will not be easy to achieve and it will not be fast. The China domestic market started to recover first, but we see this market now staying almost flat for the past few weeks. The airlines expect to jump back to 30 million seats in Asia in June, but we will see if this development will be achieved.

Airlines in North America finally found the bottom level of required capacity. As we see the number of passengers growing, according to U.S. Transportation Security Administration (TSA) statistics and other sources, scheduled capacity remains flat in this region. This is mainly due to the fact that airlines kept a relatively high number of passengers so there is a lot of space to grow passenger numbers by slow-growing load factors toward the levels which we consider to be normal in this industry. The last few weeks’ capacity in North America varies around the 6 million mark. The fast growth is not expected in June – when looking at June’s capacity, we see airlines now have 9.4 million weekly seats scheduled for the middle of June.

Europe sees a clear path toward recovery and this week the scheduled capacity there is larger than in North America. Airlines have scheduled 6.3 million seats for the week of May 25-31. This is around 2.5 times more than the lowest point we saw from April 20-26, when airlines had 2.5 million seats in their schedules.

In South America we see reports of COVID-19 spreading and a few large airlines going into bankruptcy proceedings. The scheduled capacity stays very low in this region: despite the fact we saw smaller weeks than the current one, it is still just slightly more than 10% of the capacity we saw in the middle of March.

The downsize of Africa’s market is smaller than in South America, but we still cannot see positive signs of the recovery of the market. Yes, airlines remain optimistic and we see the current schedules show more than 2 million seats scheduled for June, but we still need to wait to see if this optimism will stay. Currently, the market stays low without recovery visible in weekly statistics.

In our previous analysis we saw Oceania being the region where scheduled airlines businesss went down the fastest and stayed at this level. Still, we can now clearly see slight reopenings. This week the region has 426,000 seats scheduled to be offered for passengers. That’s low compared to the level of March (2.7 million seats), but still more than the lowest point of 288,000 weekly seats. Yet the airlines are not optimistic there and we see, as of now, the 400,000-500,000 seat level will stay throughout the month of June.

We will continue to monitor the situation on capacities and will post on our blog. Follow us here and follow our #chaviationcovid19updates on Linkedin.

55% of fleets grounded in the beginning of April.
59% of fleets grounded at the end of April.
57% of fleets grounded at the beginning May.
55% of fleets grounded the end of May.

So, our latest analysis shows the trend we noticed weeks ago seems to be true. The number of grounded aircraft is going down and markets are slowly picking up. We analysed the fleets advanced data and we see that 55% of fleets are now grounded worldwide.

This trend also supports the trend we see in airline scheduled capacities. Both analyses show the market is jumping up from the bottom, but we are very far from a pace toward steep recovery.

The number of grounded aircraft does not fully represent the full picture as many airlines reduce utilisation to a minimum to avoid storing aircraft. We expect in further months to see utilisation drops for aircraft (ch-aviation fleets advanced data also includes utilisation data).

We see Asia continuing its leadership in recovery. From 52% grounded in the beginning of April, 50% in the end of April, and 48% in the beginning of May, it has now recovered to 45% of the fleet grounded in the region.

Europe has 100 fewer aircraft grounded compared to two weeks ago. In North America, airlines grounded 70 more aircraft than two weeks ago.

Active Total %, grounded
Africa 489 1,541 68%
Asia 5,956 10,852 45%
Europe 2,263 7,949 72%
North America 4,992 9,881 49%
Oceania 432 946 54%
South America 397 1,387 71%

The main driver of the growing number of active aircraft in Asia is the China market. We can now conclude that airlines in China never had the same high level of groundings as in other parts of the world. In February, we saw more than 29% of the fleet grounded by Chinese airlines, in the end of April this number stayed at 25%, and now we see only 19% of the fleet is still not active in China.

This week we also took ch-aviation ownership data to compare how large lessors are exposed differently to grounded aircraft. We looked at the portfolios of lessors that have more than 100 aircraft placed at the airlines and which are exposed most with grounded aircraft.

From the lessors with diverse portfolios we see Carlyle Aviation Partners has 83% of its fleets grounded, while another 10 leasing companies have 70% to 80% of its owned fleets on the ground. Unsurprisingly, three lessors with the lowest share of its fleets grounded are from Asia – CALC, ICBC Financial Leasing and Bocomm Leasing have 40% or fewer of their fleets grounded.

Looking at the absolute numbers, there are two lessors with more than 500 aircraft grounded – GECAS and AerCap. These two are also the largest lessors in the world by number of aircraft owned so it is also not surprising to see a high number of grounded aircraft attached to them.

Active Total %, grounded
Carlyle Aviation Partners 37 221 83%
Aircastle 53 254 79%
Macquarie AirFinance 37 175 79%
Nordic Aviation Capital 89 395 77%
BBAM 103 411 75%
SMBC Aviation Capital 97 354 73%
Avolon 146 531 73%
Castlake 66 236 72%
Jackson Square Aviation 47 163 71%
Goshawk 54 175 69%
DAE Capital 104 326 68%
Aviation Capital Group 107 315 66%
AMCK Aviation 49 140 65%
Standard Chartered Aviation Finance 38 104 63%
GTLK – State Transport Leasing 40 103 61%
ORIX Aviation 77 198 61%
GECAS 392 986 60%
AerCap 415 984 58%
Air Lease Corporation 163 386 58%
BOC Aviation 174 382 54%
CDB Aviation 112 243 54%
Bocomm Leasing 101 168 40%
ICBC Financial Leasing 180 284 37%
CALC 101 151 33%

We use ch-aviation fleets advanced data for this analysis. Our fleet team works to deliver the latest updates on airline commercial fleets globally.

We continue to monitor the scheduled capacity from airlines around the world. This week’s update continues with the trend we’ve seen over the last few weeks – the airline industry is growing the number of seats week by week, but the recovery still doesn’t have traction. There are slight increases based on government-lifted restrictions, but it looks like the road toward recovery may be very very slow.

The size of the capacity for the current week (May 18-24) is 33.9 million seats – that is 2.5 million more than previous week: May 11-17 had is 31.4 million seats. This is an increase of 7.9%. With such a tempo the industry should recover in 15-16 weeks, but we have doubts this speed will stay for the next weeks as we noticed some airlines in South America fixed their schedules, causing a larger increase.

Airlines removed more seats for for the month of June, but the month still has a lot of optimism for capacity growth. We will see in next few weeks if this will become true.

We continue to monitor the data from the ch-aviation capacities module.

The largest market, Asia, shows some recovery. We see an 8.8% increase in scheduled seats for the current week compared to the previous week. The total market drop in Asia still remains relatively small. We now see the market is even more than half of the seats what it used to be. The main reason for this continues to be the Chinese domestic market.

Airlines in North America finally found the bottom level of required capacity. Last week’s capacity went below 6 million seats and is now back to 6 million. But the airlines do not expect fast recovery, and June is not seing fast growth in seats offered like in other regions (even it is a bit fake, read last week’s blog post to find out why).

Europe saw the largest jump of offered seats for this week. The week before we saw 3.8 million seats offered, while this week jumped by 19% to 4.4 million seats. While this is still only 17% of the capacity what we consider to be “normal” at this time of the year in Europe, if the pace will stay the same, we can see very rapid recovery in Europe going to summer-peak and government limitations lifted.

We can’t comment a lot on capacity in South America as we saw a few airlines fix their schedules (what was supposed to be an error last week). Still, the capacity offered in South America remains at very low levels with no clear path to recovery. The optimism jumps in the month of June, but we can’t be sure if this is airlines still not being able to update their schedules.

Reductions of capacity continues in Africa. But what is usually a less busy continent compared to South America now is more than twice its size in terms of air connectivity. We believe airlines still haven’t made June schedules right at the current point and we will see further reductions going forward.

“We cut too much for May, too litte in June” – that’s the message you hear from network planning teams in Oceania’s airlines. We see slight increases in seats offered for the current week and next week, but the airlines in this part of the world are the most pessimistic about recovery in June. We may see May’s level in June in this market. There’s an explanation, however – as winter begins in the southern hemisphere, it’s very difficult to show an upward trend in the low season.

We will continue to monitor the situation on capacities and will post on our blog. Follow us here and follow our #chaviationcovid19updates on Linkedin.

At ch-aviation we are tracking new aircraft deliveries of the largest aircraft manufacturers: Airbus, Boeing, Bombardier, COMAC, De Havilland, Embraer and Irkut.

An analysis of deliveries for the first four months of 2020 shows a significant impact of the Coronavirus/COVID-19 pandemic for new aircraft deliveries from manufacturers to airlines. In April, we saw just 15 aircraft delivered by all manufacturers while the average monthly delivery rate in 2019 was more than eight times higher.

We saw the first signs of aircraft deliveries being hit in February, but it was just the beginning, and now we see new deliveries have almost dried up.

December is the busiest month for manufacturers as they try to deliver as many aircraft as possible in the calendar year. The first two months are usually slower than year-end, but March to June usually is a very busy stretch both for manufacturers and airlines. With the COVID-19 pandemic we see a completely different trend this year – aircraft deliveries have being going down since February.

Boeing deliveries last spring were hit by the grounding of Boeing 737MAX aircraft, the most popular type in Boeing’s portfolio. Still, we can see this year is even worse.

Airbus in February still had a quite positive month with more deliveries than the year before (mainly due to more Airbus A220 deliveries). But when the global pandemic spread, new aircraft deliveries by the European manufacturer went downhill.

When we analysed new aircraft deliveries back in February, we saw new deliveries stop in China, Hong Kong and Macao. Now, our capacity analysis and aircraft grounded analysis shows some signs of recovery in these markets, but aircraft deliveries see no optimism yet.

The number of new deliveries in China, Hong Kong and Macao stopped when the region entered COVID-19. There were no new aircraft deliveries to airlines in China, Hong Kong and Macao in February, whereas 20 new aircraft were delivered on average per month in the same month in 2019. There was one delivery in March and two in April, but this is far from being a sign of recovery in aircraft deliveries. In March, we saw one Airbus A320NEO delivered to “Spring Airlines” and in April the new deliveries were locally manufactured Comac ARJ21 for “Chengdu Airlines” and another Airbus A320NEO for “Loong Air”.

Our hypothesis back in March was right – based on what we saw in China/Hong Kong/Macao, aircraft deliveries slowed down worldwide. Based on the grounded aircraft and capacity data in Asia, we should expect first to see aircraft deliveries being resumed in this part of the world and other continents should follow the path of the recovery.

We used ch-aviation fleets advanced for this analysis.

Follow our blog and our LinkedIn page for the latest data extracts on #chaviationcovid19updates.

Our scheduled capacity review this week includes data for the first week of June. You will see, there is a huge jump in scheduled capacity for the period June 1-7 in most graphs. Do airlines believe the traffic will recover on June 1?

The answer is most likely “no.” We see a lot of uncertainty in future schedules. There are many airlines around the world that are grounded as of now, but they still have their pre-COVID-19 schedule on sale from Day X. The Day X varies airline by airline – in some cases this date is government imposed, in other cases this date is set by the airline. It is unbelievable that traffic will come back immediately in any market, so, most likely, we will see gradual increases in demand in upcoming months. June is the new month, so there are many airlines that have Day X set to June 1 (in most of the cases, this date, selected as the first day of the month, is merely symbolic).

We see that post-June schedules are not adjusted and in many cases these have not been updated since January or February, when COVID-19 began to spread. We believe the airline planning departments are able to adjust their schedules for the next weeks only and that the future is still too uncertain.

Nevertheless, the industry is not going down anymore and the current’s week capacity remains and similar level as few previous weeks.

We continue to monitor the data from the ch-aviation capacities module.

The size of the capacity for the current week (May 11-17) is 31.4 million seats.

We should remain optimistic from the fact that capacity for the current week is slightly higher than the last week (30.9 million). Over the last five weeks capacity varied from 30.9 million minimum to 32.9 million seats maximum. The weeks when airlines removed millions of seats every week from the schedules are now gone.

Asia, the largest region in terms of market size, sees a slight capacity growth for the second week in a row. We saw 18.9 million seats scheduled two weeks ago and the last week had 19.5 millinon seats and now the current week has 20 million seats scheduled. Still, this is less than half of the seats scheduled in the middle of March. We don’t believe the sharp capacity jump will stay for the first of June, but we should remain optimistic with the slow recovery in the region.

The airlines in North America are still searching for the bottom level of required capacity. The current week’s capacity went below 6 million seats. With the latest update we see airlines vanished 9 million seats from their capacity in the first week of June – we expect similar actions in other parts in the world too.

Similar to Asia, we see very slow recovery happening in Europe. The current week has the capacity of 3.8 million seats, while we saw 2.5 million seats scheduled three weeks ago. Yet this is only 13% of the market size we considered to be “normal” before COVID-19 hit the continent. Airlines have been busy working with the short-term schedule, so we also expect the capacity curve will be flattened toward June.

The capacity in South America went further down. Now the current’s week capacity is just 5.7% of the size what we considered to be “normal” a few months ago. Airlines started to reduce schedules for June and we also see a huge decrease for the first week of June, similar to North America.

Reductions of the capacity continues in Africa too. But what is usually a less busy continent compared to South America now is more than twice of the size in terms of air connectivity. We believe airlines still haven’t made June schedules right at the current point and we will see further reductions going forward.

In Oceania we see the capacity for May stayed almost flat. Still, the schedules seems not adjusted for the month of June, which shows capacity quickly jumping up. We believe there should be some rebound in the schedules looking to the other parts of the world, but the current schedules look too optimistic.

We will continue to monitor the situation on capacities and will post on our blog. Follow us here and follow our #chaviationcovid19updates on Linkedin.