Airlines face growth warning as virus curtails Singapore Airshow (updated)

SIA Engineering

10/02/2020 10:14

* 'All bets off' for traffic forecasts - head of Asian
airline
group
    * SIA Engineering, GE Aviation postpone groundbreaking
ceremony
    * Saudi Arabia General Authority for Military Industries
withdraws

 (Adds comments from U.S. official, Qatar Airways)
    By Jamie Freed and Tim Hepher
    SINGAPORE, Feb 10 (Reuters) - Asian airlines face "drastic"
cuts in their planned growth because of the coronavirus crisis,
an industry group warned, adding gloom to an already depleted
Singapore Airshow as more companies scaled back plans on Monday.
    The Singapore Airshow from Feb. 11 to 16 is proceeding, but
the exhibition centre is pockmarked with empty spaces that would
have held displays from Chinese companies and others skipping
the show because of the epidemic, which has killed more than 900
people.  urn:newsml:reuters.com:*:nL4N2AA01K
    More than 70 exhibitors, including major U.S. defence firms
Lockheed Martin Corp  LMT.N  and Raytheon Co  RTN.N  have pulled
out over concerns related to the new coronavirus.  urn:newsml:reuters.com:*:nL4N2A5534
    Few deals are expected at the biennial event, where the
epidemic has triggered new safety measures and cast a shadow
over airline profits and demand for airplanes.
    Before the coronavirus hit, the International Air Transport
Association had expected passenger numbers to rise by 4% in 2020
and cargo traffic to be 2% higher.
    "All bets are off in terms of traffic forecasts for this
year," Andrew Herdman, the director general of the Association
for Asia Pacific Airlines, said in an interview.
    "If you look at the schedule cuts and the actual operations
they have been cut by 50%, 60%, 70% within China. It is pretty
drastic," he said.
    The Pentagon reduced the size of its delegation to the air
show, which had been set to include its chief weapons buyer,
U.S. Undersecretary of Defense Ellen Lord, Reuters reported on
Friday.  urn:newsml:reuters.com:*:nL1N2A70TI
    "Sure, there were some adjustments by some colleagues but it
has not changed our footprint," U.S. Department of State
Assistant Secretary for Political-Military Affairs R. Clarke
Cooper said Monday, adding that his agency's delegation remained
fully intact. 
    "The United States still remains the largest international
presence at the air show for 2020," he told reporters on a call.
    Singapore on Friday raised its alert level for the
coronavirus outbreak to orange, the same level reached during
the 2003 Severe Acute Respiratory System (SARS) outbreak,
sparking panic buying at supermarkets across the island. 
    There are 43 confirmed cases of coronavirus in Singapore.
The orange alert level advises organisers to cancel or defer
non-essential large-scale events and recommends precautions such
as temperature screening and more frequent cleaning of common
areas for those that do proceed.
    Health experts, however, said they were concerned that
temperature screening might not be effective, given reports the
coronavirus could be spread by people without symptoms.
    "Temperature screening is okay to pick up people already
sick - and those people should not be coming to the show anyway
- but doesn't pick up people incubating the virus," said John
McBride, an infectious disease physician and professor at
Australia's James Cook University.
    SIA Engineering Company Ltd  SIAE.SI  and GE Aviation  GE.N 
on Monday said they had postponed plans to hold a groundbreaking
ceremony for a new engine overhaul facility in Singapore on
Tuesday until further notice because of the raised alert level.
    Qatar Airways said on Monday it was postponing plans for its
chief executive Akbar al-Baker to open a new airport lounge
after his country issued a warning advising citizens to
reconsider travel to Singapore due the virus. He had been due to
host the official opening of the lounge on Friday.  urn:newsml:reuters.com:*:nS7N27R00N
    Saudi Arabia's General Authority for Military Industries
withdrew from the show late Sunday, citing concerns associated
with the coronavirus.
    The air show's organisers said on Sunday they were expecting
more than 930 companies from 45 countries and 45,000 trade
attendees - down from the 54,000 at the last show in 2018. They
also plan to limit public attendance. 
    The lobbies of major hotels, usually bustling with
attendees, were noticeably quiet.
    A spokeswoman for the organisers on Monday declined to
provide an update on numbers and why the air show was going
ahead when many smaller associated events and briefings were
being cancelled over coronavirus concerns.
    Cancelling the show would lead to refunds running into the
tens of millions of dollars, a source at one of the exhibitors
told Reuters on condition of anonymity because of the
sensitivity of the matter.
    Organiser Experia Events, partly owned by ST Engineering
 STEG.SI  and government agencies, charges at least S$1,550 per
square metre for space in the show's exhibition hall, according
to its website. 
    That would equate to more than S$3 million  ($2.16 million)
for ST Engineering's booth, the show's largest at more than
2,000 square metres. ST Engineering is majority owned by
Singapore state investor Temasek Holdings  TEM.UL .
    Experia Events managing director Leck Chet Lam on Sunday
said he could not comment on the financial terms of a
cancellation.
    "That is between us and the exhibitor," he told reporters.
($1 = 1.3896 Singapore dollars)

 (Reporting by Jamie Freed and Tim Hepher. Editing by Gerry
Doyle and Louise Heavens)
 ((Jamie.Freed@thomsonreuters.com; +61 2 9321 8174;))