'Single biggest shock': Aviation battles coronavirus
Send a link to a friend
[March 17, 2020] By
Jamie Freed and Tim Hepher
SYDNEY/PARIS (Reuters) - Boeing and other
U.S. aviation companies are seeking billions of dollars in aid as they
battle to survive a plunge in demand caused by the coronavirus pandemic,
while Airbus is pausing production at two sites to bolster health and
The rapid spread of the virus across the world has battered airlines as
governments have introduced travel restrictions and consumers have
stopped making bookings, calling into question the survival of several
To preserve cash, airlines are cutting flights, laying off staff,
suspending dividends, selling planes and flying cargo on empty passenger
"It's now fair to call this the single biggest shock that global
aviation has ever experienced," Qantas Airways Ltd CEO Alan Joyce said
in a memo to the airline's 30,000 staff on Tuesday that was seen by
Boeing Co on Monday said it was in talks with senior White House
officials and congressional leaders about short-term assistance for the
entire U.S. aviation sector.
U.S. airlines and cargo carriers have said they are seeking at least $58
billion in loans and grants along with additional tax changes, while
airports are seeking $10 billion.
European airlines have also stepped up calls for emergency government
aid. Passenger traffic across the region slumped by more than half on
average last week, and the situation will worsen as borders closed,
trade body Airports Council International Europe said.
Industry consultancy Tourism Economics forecast international travel
will slump at least 10.5% this year, the biggest year-on-year drop.
Planemaker Airbus SE said on Tuesday it would pause production and
assembly at its French and Spanish sites for the next four days to put
in place strict health and safety provisions.
British infrastructure and aviation group Stobart said it likely needed
additional liquidity because of the disruption to its business,
especially at London Southend Airport.
Airbus shares were down more than 7% at 0930 GMT after heavy losses on
Monday. Boeing shares closed down 24% on Monday.
In Asia, Qantas, which is looking to raise a few hundred million dollars
by refinancing some aircraft, said on Tuesday it planned to cut
international capacity by 90% and domestic capacity by 60% until at
least the end of May.
"Our goal is to protect as many jobs as possible and to make sure we
remain strong enough to ride this out," Joyce told staff in the memo
seen by Reuters.
New Zealand's Auckland International Airport said on Monday it would
scrap its interim dividend after freezing hiring and halting
Air New Zealand said it would cut capacity to Australia by 80% from
March 30 to June 30 after both countries said over the weekend that all
travelers would need to self-isolate for 14 days after arrival.
[to top of second column]
An Air New Zealand aircraft passes a fuel truck on the tarmac of
Auckland Airport during fuel shortages in New Zealand, September 20,
2017. REUTERS/Nigel Marple
Australian airports are set to lose more than A$500 million ($307 million) in
take-off and landing fees, the Australian Airports Association said.
Avinor, a state-owned Norwegian company, said on Tuesday the number of
passengers traveling from the country's airports fell 40% in the week ending
March 15 from the same period a year earlier.
The only bright spot for airlines is the cargo market, where rates are surging
as a result of the loss of capacity in the belly of passenger aircraft as those
flights are cut. Airlines are flying some planes without passengers to transport
cargo due to high demand.
(Graphic: Global travel,
Simon Birmingham, Australia's minister for tourism, said on Tuesday that neither
Qantas nor smaller rival Virgin Australia Holdings Ltd had asked for a bailout,
but that the government had not ruled out providing assistance.
"They believe they are viable and have strong cash positions ... but we want to
make sure we maintain that confidence in the airlines," Birmingham told
Hong Kong's Cathay Pacific Airways said on Monday it had agreed a $703.8 million
deal with lessor BOC Aviation to sell and lease back six Boeing 777-300ER
airplanes to raise cash.
The carrier, one of the earliest and hardest hit by the outbreak due to its
proximity to mainland China where the virus originated, said its full-service
airlines, Cathay Pacific and Cathay Dragon, had made an unaudited loss of HK$2
billion ($257.5 million) in February alone.
Cathay Pacific plans to cut up to 90% of its capacity in April.
"If we do not see a relaxation of travel restrictions in the near future, we
expect the same arrangement will have to continue into May," Cathay Pacific
Group Chief Customer and Commercial Officer Ronald Lam said in a statement.
Japan's ANA Holdings said it would cut 2,630 more international flights serving
58 routes between March 29 and April 24.
Philippines' Cebu Pacific said it would cancel all flights from March 19 to
April 14 after stringent quarantine orders.
(Reporting by Jamie Freed and Tim Hepher; additional reporting by Colin Packham
in Sydney, David Shepardson in Washington, Sayantani Ghosh in Singapore; Editing
by Lincoln Feast, Gerry Doyle and Mark Potter)
[© 2020 Thomson Reuters. All rights
Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.