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Global oil demand is expected to shrink in first quarter 2020, for the first time in 10 years, according to the International Energy Agency. China made up three fourths of growth in oil demand in 2019. The border closures, flight cancellations, and factory closures, are affecting Chinese oil consumption as a result of the coronavirus. China's growth in first quarter is expected to be 3-4% than a year earlier.

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Efforts to cut costs by new Lufthansa CEO Carsten Spohr have led to pilot strikes in Dec. 2014, with flight cancellations and 160 million euros of lost earnings in 2014. Intense competition and high operating costs are leading to this determined effort to bring costs down. Lufthansa and other major airlines such as Air France have seen the market change with about 40% of the intra European travel market having gone to Ryanair, EasyJet and other low cost carriers. Lufthansa's profit has declined to 300 million euros in 2013 from 1.2 billion in 2012, giving urgency to CEO Spohr's effort to remain competitive. For 2012 and 2013 Lufthansa cut costs by about 1 billion euros, and the target is for another 500 billion euros in savings for 2014. Most of this was done by job reduction of 3500 jobs, and by shifting low cost flights outside the Munich and Frankfurt hubs to a separate lowcost carrier, Eurowings, based in Dusseldorf. This has echoes of the strategy pursued by Air France for Transavia low cost carrier, leading to strikes by the pilots unions and flight cancellations. The Eurowings carrier will use a different pay structure with about 30-35 percent lower pay and benefits than the main Lufthansa carrier, done by separate agreements with pilots, maintenance and cabin crews unions. Critics say the focus on a separate low cost carrier is not the right strategy as it would remain a small part of Lufthansa group. Spohr, a company executive with 20 years in various Lufthansa positions says this is only part of a larger strategy and other changes to make Lufthansa competitive. Just as at Air France, pilots unions of Lufthansa see this as a step towards reducing in future the pay structure at the main airline operations. Labor costs are about a fifth of 30 billion euros in annual revenues at Lufthansa in 2013, with 118,000 employees worldwide....

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Production delays, outsourcing issues and other problems are now hurting Boeing with cancellation of orders as airlines with lower profits in today's economic uncertainty are unable to take advantage of the new fuel efficient 787's in timely manner. Quantas first placed its order for upto 115 Dreamliners in 2005, and it hoped to reduce fuel costs with the 20% more fuel efficient Dreamliners than its 767 planes, which it hoped to retire. 28 Dreamliners were to be delivered by the end of 2011. This never happened as Boeing ran into production problems and only 17 were delivered to all airlines by September 2011. With the global economic uncertainty and slowdown Quantas is predicting a 90% drop in pretax profits for the fiscal year ending in June 2012 to A$50 million. With the situation changed Quantas decided to change the order by cancelling the orders for the larger 787-9 Dreamliner and keep the order for the 15 smaller 787-8 jets to save $8.5 billion. This follows a change made by China Eastern Airlines to cancel orders for 24 787s and buy smaller single aisle 737s for domestic flights. As a result Boeing's total orders stand at 824 in mid 2012, with only 7 new orders since 2007. Boeing says it needs to sell at least 1100 Dreamliners for the 787 program to be profitable. Its own forecast is for sales of an additional 2700 small twin aisle jets like the 787 between 2012 and 2031, with Boeing getting half of the market. The larger longer range 787-9 model will start delivery in 2014 and another version for more capacity on shorter routes the 787-10 is being discussed. Both programs Boeing's 787 Dreamliner and the competing Airbus A-350 program have suffered a series of production problems, outsourcing issues and delays in recent years. ...