Airlines across the globe slash schedules, cut jobs
The measures are a response to the widespread travel restrictionsEuropost
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, news wires reported.
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, one of the three largest US airlines, booked $1.5bn 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% and reduce flight capacity by about 50% in April and May, with deep capacity cuts also expected into the summer travel period.
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 travelers would have to self-isolate for 14 days.
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 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% 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 labor unions to reduce its salary cost “significantly”.