Airlines grapple with layoffs, cancellations

Airlines around the world Thursday scrambled to cancel flights, lay off workers and reassure anxious travellers, capping a dizzying period of weeks in which bookings have evaporated and investors have lost confidence in the industry.

The latest frenzy was touched off by U.S. President Donald Trump’s announcement Wednesday that beginning Friday, most travellers from 26 European countries would be barred from visiting the United States for 30 days, news that sent airline stocks tumbling. Shares of United Airlines and Delta Air Lines closed down by more than 20 per cent and American Airlines was down about 17 per cent. Earlier, shares of the parent company of British Airways closed down 16 per cent in London.

Already reeling from a steep decline in bookings because of the coronavirus outbreak, airlines now stand to lose millions of dollars in revenue from a dramatic decline in trans-Atlantic flights, which account for a big chunk of their business.

On Thursday, Norwegian Air, a once fast-growing discount carrier that flies to many U.S. cities, said it would temporarily lay off half of its staff and ground 40 per cent of its longhaul flights and 25 per cent of shorter flights.

“Suspending travel on such a broad scale will create negative consequences across the economy,” said Alexandre de Juniac, chief executive of the International Air Transport Association, an industry group.

According to the association, last year, about 200,000 flights carried passengers between the United States and the 26 countries targeted in Trump’s order, averaging about 550 flights carrying 125,000 travellers per day

Over the next four weeks, the ban would affect more than 6,700 flights, according to an analysis by OAG, an aviation data provider.