AUSTIN, Texas — The suddenly spiking U.S. death toll from the novel coronavirus known as SARS-CoV-2 threatens to have swift and dire effects in the aviation industry, affecting both airlines and jetmaker Boeing.

At a large annual conference here for airplane financiers and lessors, speakers outlined the tremendous hit already dealt to airlines in Asia, and attendees expressed growing concern for the likely impact ahead in Europe and the U.S. All agreed that although the air travel business will recover long-term, this year looks set for a significant downturn.

Keynote speaker Rob Morris, global head of consultancy for Flight Ascend by Cirium, warned of a “period of great uncertainty” and the likelihood of “significant airline failures” in 2020.

He declared the industry’s 10-year growth cycle over.  For airlines, he said, the fact that Boeing’s 737 MAX is grounded “is a virtue right now” because the world’s airplane fleet capacity has to shrink in the months ahead.

Boeing’s managing director for marketing, Darren Hulst, described how the epidemic has  curtailed air traffic in China and Asia. On Jan. 6, he said, more than 3,250 flights originating in China connected more than 850 city pairs worldwide; . On Feb. 21, less than seven weeks later, only about 700 such flights took off, connecting 240 city pairs. Hulst added that many of the February flights were air cargo; if only passenger service were counted, the slowdown “would be even more dramatic.”

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Alok Anand, chief executive of airplane asset management company Acumen Aviation, said he met Monday with representatives of a big European airline that has had to park two Boeing 777s that fly regular routes to China. “They cannot fly and they have nowhere else to place them,” he said.

Anand said that though larger airlines can handle that, “we are expecting a few smaller airlines to go bankrupt.”

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Among the airlines mentioned on the sidelines of the conference as likely to face enormous stress on their cash reserves are Norwegian, a major customer for Boeing’s 737 MAX, and Air Asia, a major customer for the Airbus A320neo and A330neo.

During the 2003 outbreak of the original SARS virus in China, air traffic in Asia Pacific was drastically down for three months, yet largely recovered within six months.

Boeing’s Hulst pointed out China’s effect on aviation has grown enormously since then. In 2003, China represented less than 3% of global traffic, compared with 18% today. And the total fleet of commercial airplanes in the broader Asia Pacific region was 18% of the world’s fleet, compared with 32% today.

Richard Aboulafia, an analyst with the Teal Group and conference speaker, in an interview said aviation people initially took the new virus too lightly. “Everyone thought it would echo SARS,” he said. “Now it looks a lot more drastic.”

He said he’s worried because SARS-CoV-2 has appeared during a very different global economic environment compared to that around the SARS outbreak in 2003. Then, China was on the rise economically, which meant that when the virus was brought under control, recovery was fast.

But today, he said, political and economic retrenchment in China has caused an economic slowdown there and U.S.-instigated trade tension worldwide has resulted in a broad pullback in globalization, a trend that he sees as holding back the recovery from a severe air traffic downturn.

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“We’ll get through this. It’s not the Black Death,” he said. “But we are an industry that depends on open borders. It’s what the poor macroeconomic environment means for the recovery that has me concerned.”

Still, most at the conference insisted on a long-term optimistic view: a steady 50-year history of upward-trending global air traffic that has weathered substantial blips from the shocks not only of SARS, but of the Gulf wars, the 9/11 terrorist attacks and the 2008 global financial crisis.

John Plueger, chief executive of Air Lease Corp., a major airplane lessor, said “traffic always rebounds and comes back even stronger.”

“It’s important just to be calm,” Plueger said, adding that he’s offering to buy airplanes from some airlines in distress to provide them with cash and get them through.

Mark Pearman Wright, head of marketing for aircraft investors at Airbus, told the conference it wasn’t a time for “apocalyptic helplessness.” He predicted “a bounce back in 2021 and back to trend in 2022” for air traffic.

As for Boeing’s grounded 737 MAX, it may be that some airlines won’t want to get their long-delayed deliveries until the impact of the virus has passed.

But since the MAX’s return to U.S. flight schedules won’t happen until August at the earliest, and new MAX production will start very slowly — airlines and lessors expect probably no more than 20 jets per month for some time — Boeing’s plan for the return to service for now continues unchanged.

When Hulst was asked an audience question if Boeing was considering dumping the MAX and replacing it with a new airplane, he responded unequivocally: “We don’t have a plan to replace the MAX.”

And ALC’s Plueger said his team is “engaged with the Boeing company on a much more detailed basis” about exactly which of its grounded MAXs will be delivered first and when. This suggests that — regarding regulator approval for the MAX to fly again — “Boeing is still confident the midsummer schedule will hold true,” he said.

Ten days ago, before the novel coronavirus had spread much beyond Asia, Alexandre de Juniac, Director General and CEO of the International Air Transport Association described “challenging times for the global air transport industry.”

Asian carriers had then begun to cut capacity and in some cases routes. By now, Hong Kong-based Cathay Pacific has 120 planes grounded at any given time, about half of its fleet.

“Stopping the spread of the virus is the top priority,” de Juniac said. “This will be a very tough year for airlines.”

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