b'Market UpdatesGlobal Airfreight Industry Braces for More Disruptions in 2020 with Coronavirus Outbreak2020Afterarough yearin2019 withglobaltradeslowdown2019caused by trade protectionism, industry cyclical downturn ofelectronics and automotive sectors, the airfreight industrywas hopeful that the easing of trade tensions between US2019and China at the beginning of the year would allow gradualrecovery of global trade and airfreight demand. This wasshortlydampenedwiththeconfirmationandspreadof Novel Coronavirus (Covid-19) in Mainland China, leadingtolockdowninWuhanandsubsequently,partialorfull50%lockdowns in other parts of the country.45%Passenger flight cancellations since the Lunar New Yearhas significantly reduced air cargo capacity from MainlandGDP4.3%China with a reduction of about 50% at its worst. Passenger2019GDP16.5%bellies are reported to represent 45% of all international air;cargo capacity in and out of Mainland China. As production15graduallyresumesinChina,shippersweresuddenlyfaced with severe capacity crunch, leading to bottlenecks11% in supply chains and production worldwide. At the time of SARS, Mainland China was the sixth largest economy,(WHO)311accounting for only 4.3% of world gross domestic product20192019(GDP). Mainland China is now the worlds second largesteconomy, accounting for 16.5% of world GDP in 2019. Today,Singapores largest trading partner is China. In terms of airtrade by volume, Mainland China is Changis top air cargomarket. Its share of air cargo throughput has since grown3three folds since 15 years ago. In the first two months this year, our overall air cargo traffic with Mainland China andHong Kong has declined by 11% with the prolonged factory335% 1shutdowns and cargo capacity constraints. As the virus spreads across continents, on 11 March, theWorldHealthOrganisation(WHO)declaredCovid-19as3a global pandemic. Covid-19 has since brought in moretravel bans, lockdowns and quarantines, as well as massive disruptionsinsupplychainsandinternationaltrade flows. To date, numerous State of Emergency, which have mandatedclosureofnon-essentialbusiness,havebeen declared across US and Canada. Such draconian measures were also seen in different parts of Europe including Italy, France, UK and Spain. In India, the Government ordered a lockdown, which led to its manufacturing being shut down till end of March. Air cargo capacity reductions have now become global and is no longer confined to China. By end March, global capacity fell by 35% 1and is slated to decline further. The biggest absolute drop was seen on intra-Asia air trade lane. The air freight industry is currently seeing an unprecedented surge in freighter demand while air freight rates are on a constant rise on the major trade lanes, due to the confluence of capacityshortfallandstockpiling.InMarch,Changisaw an increase in our freighter capacity and connectivity. Not only have our scheduled freighter operators added flights in and out of Singapore, Changi has also facilitated ad-hocAd-hoc Freighter Services by Non-Scheduled Freighter Operatorsfreighterflightsbynon-scheduledoperatorsincludingEthiopian Airlines Cargo, MASKargo, SF Airlines, and Sichuan1Source: Seabury Consulting: SeaburyChangi Cargo Insight 7'