Airlines seek state relief after virus disrupts travel plans
PARIS: Airlines in the US and Europe cut flights, idled planes and drafted plans to eliminate jobs, while seeking government support to weather the roughest downturn in the industry’s history caused by the coronavirus.
American Airlines Group Inc., Delta Air Lines Inc., United Airlines Holdings Inc. and Southwest Airlines Co. said they’re discussing potential aid from the government, without providing details.
Germany and France are weighing financial aid to help get Deutsche Lufthansa AG and Air France-klm through the crisis. The head of Norwegian Air Shuttle ASA acknowledged that the discount carrier is at the brink and pleaded for help. The Italian government is considering pumping 300 million euros ($333 million) into struggling Alitalia SPA and may take over the airline, people familiar with the matter told Bloomberg.
In the UK, the airline industry will need as much as $9.2 billion in government aid, Peter Norris, chairman of Virgin Atlantic Airways, will say in a letter to Prime Minister Boris Johnson to be s e n t Mo n d a y , S k y Ne ws reported.
The economic effects of the viral outbreak have slammed the airline industry as people scrap travel and countries place restrictions on flights from nations with the highest levels of infection. President Donald
Trump’s decision to set curbs on European f l i ghts capped a t u mul t u o u s we e k a n d is expected to upend a trans-atlantic market that’s usually the world’s most lucrative.
On Saturday, Trump added bans on the UK and Ireland to the initial list of continental European countries facing temporary restrictions. The existing travel curbs on Europe affect about 7,300 flights to the US, or more than 2 million one-way passenger tickets over the one-month period, according to Cirium, which tracks traffic. Adding in the UK and Ireland adds about 4,300 more flights to the total.
“It is a crisis of global proportions like no other we have known,” British Airways chief Alex Cruz said in an internal memo on Friday and seen by Bloomberg. It’s worse than the SARS outbreak in the early 2000s, 9/11 in 2001 and the financial meltdown of 2008-09, he said. Jobs will be lost as the airline idles planes, cuts back on flights and moves to protect it balance sheet, Cruz said. The airline, owned by IAG SA, has held talks with multiple banks on i t s urgent financing need, the Financial Times reported.
The virus first swept through Asia, decimating air traffic and leading to a Chinese government decision to take charge of the parent of Hainan Airlines. Now the epicenter of the pandemic has moved to Europe, with countries locking down travel and confirmed cases topping 140,000 across the globe. Measures taken by states could cost the tourism industry 50 million jobs, according to the World Travel & Tourism Council.
I n t he US, where Trump declared a state of emergency on Friday, the situation has quickly turned grim for airlines.