Airline industry turmoil deepens as Covid-19 pain spreads
SYDNEY/WASHINGTON: Airline industry turmoil deepened yesterday as Qantas Airways Ltd told most of its 30,000 employees to take leave and India prepared a rescue package of up to US$1.6 billion (RM6.99 billion) to aid carriers battered by coronavirus, government sources said.
The UN’s International Civil Aviation Organisation called on governments to ensure cargo operations were not disrupted to maintain the availability of critical medicine and equipment such as ventilators, masks, and other health and hygiene items that will help reduce the spread of the coronavirus pandemic.
Passenger operations have collapsed at an unprecedented rate as the virus spreads around the world, with Delta Air Lines Inc parking more than 600 jets, cutting corporate pay by as much as 50%, and scaling back its flying by more than 70% until demand begins to recover.
Shares in US airlines fell sharply on Wednesday after Washington proposed a rescue package of US$50 billion in loans, but no grants as the industry had requested, to help address the financial impact from the deepening coronavirus crisis.
The Trump administration’s lending proposal would require airlines to maintain a certain amount of service and limit increases in executive compensation until the loans are repaid.
American Airlines Group Inc in a memo to staff rebuffed criticism that it had rewarded its shareholders with too many dividends and stock buybacks in better times, leaving it with less cash to manage the crisis.
In Australia, Qantas said it would cut all international flights and two-thirds of its 30,000 workers would need to take paid or unpaid leave. The Australian government has warned citizens not to travel overseas and said it would ban the arrival of non-citizens and residents starting Friday.
In China, the epicentre of the outbreak, international flight cancellations are rising this month, hitting 2,938 on average daily so far, Reuters calculations based on data from aviation data provider Variflight showed. That compared with 2,460 daily flights cancelled in February and 387 in January. – Reuters