SYDNEY/CHICAGO: Airlines around the world said they would make more drastic cuts to their flying schedules, shed jobs and seek government aid after countries further tightened border restrictions because of the fast spreading coronavirus.
The owner of British Airways said on Monday that it would cut flying capacity by at least three quarters in April and May, and that its outgoing boss, Willie Walsh, would defer his retirement as the carrier tries to survive the fallout of the virus.
International Consolidated Airlines Group, the parent company that also owns Iberia and Aer Lingus, said it would also ground flights, freeze discretionary spending, reduce working hours and temporarily suspend employment contracts.
United Airlines Holdings Inc, one of the three largest US airlines, booked $1.5 billion less revenue in March than during the same time last year and warned employees that planes could be flying nearly empty into the summer, even after severe flight cuts.
United said it would cut corporate officers’ salaries by 50 per cent and reduce flight capacity by about 50 per cent in April and May, with deep capacity cuts also expected into the summer travel period.
“This crisis is moving really quickly,” United Chief Executive Oscar Munoz and President Scott Kirby said in a memo to employees on Sunday.
Things worsened over the weekend as Spain declared a state of emergency, the Trump administration added Britain and Ireland to its list of countries facing travel curbs, and Australia and New Zealand said all travellers would have to self-isolate for 14 days.
“We call on Congress and the White House to take all measures available to protect the health and payroll of American workers,” said Sara Nelson, president of the Association of Flight Attendants-CWA, which represents 50,000 US flight attendants at 20 airlines, including United.
CAPA Centre for Aviation, an airline analysis and consulting firm, said most airlines globally will be bankrupt by the end of May without coordinated government and industry action to avoid such a catastrophe.
“Demand is drying up in ways that are completely unprecedented,” CAPA said in a report. “Normality is not yet on the horizon.” UK airlines called on the British government to help ensure their survival, while Germany’s Tui AG and Scandinavian carrier SAS said they would suspend the vast majority of operations due to the COVID-19 outbreak and apply for government support.
Finnair on Monday issued its second profit warning in three weeks, saying it would report a substantial comparable operating loss for 2020 as it was cutting around 90 per cent of its normal capacity from the beginning of April. The Finnish airline also dropped its dividend.
EasyJet, Europe’s fourth-biggest airline, said it could ground the majority of its fleet, while Icelandair Group said it was cutting capacity and working with labour unions to reduce its salary cost “significantly”.
Air New Zealand Ltd said job losses would be necessary as it cut long-haul capacity by 85 per cent over the coming months.
“We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people,” Air New Zealand Chief Executive Greg Foran said in a statement.
The airline has halted trading in its shares until Wednesday.
Qantas Airways Ltd said it would be making fresh cuts to its flying schedule beyond the 25 per cent reduction in international capacity announced last week due to the new travel restrictions. — Reuters
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