COVID-19 threatens Canadian aerospace companies as global air travel plummets

Air travel

An aviation expert says the novel coronavirus is having a "severe impact'' on global air travel, with implications for Canadian airlines and aerospace companies.

National Bank analyst Cameron Doerksen says the spread of the virus represents a "clear threat'' to the sustainability of the industry's current cycle.

The broader economic slowdown triggered by the virus "would likely hurt demand'' for new business jets, Bombardier Inc.'s main source of income after selling it sold its rail business to French train giant Alstom SA last month.

Doerksen says Chorus Aviation Inc.'s regional flight service for Air Canada will remain insulated from the headwinds, but its global plane-leasing business is at risk.

Disruption could also reach flight simulator maker CAE Inc. if carriers impose a pilot hiring freeze, park planes and hold off on new deliveries. 

Aircraft landing gear manufacturer Heroux-Devtek Inc. will also feel the pinch if Boeing Co. lowers production for the 777X wide-body jetliner.

The International Air Transport Association trade group forecasts that global passenger revenue could decline by US$113 billion or 13.5 per cent this year due to COVID-19, which has caused at least 3,400 deaths and spread to more than 80 countries as governments ramp up containment measures.