Skies clear as further coronavirus curbs ground more flights

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[March 23, 2020]  By Jamie Freed and Anshuman Daga

SYDNEY/SINGAPORE (Reuters) - Widening travel curbs to contain the spread of the coronavirus led to further flight cancellations on Monday, with new restrictions spanning India, Australia, New Zealand, the United Arab Emirates (UAE), Hong Kong, Singapore and Taiwan.

Globally the number of scheduled flights last week was down more than 12% from a year ago, flight data provider OAG said, with many airlines having announced further cuts to come.

"It is a war against a virus," Andrew Herdman, director general of the Association of Asia Pacific Airlines, told Reuters by telephone on Monday.

India's commercial airlines were to cease domestic flights from midnight Tuesday, a civil aviation ministry spokesman said, the latest country to impose tight air travel restrictions.

Cargo flights were exempt from the order.

The impact on planemakers has been deep and sudden and on Monday planemaker Airbus <AIR.PA> announced new steps to bolster its financial position, including the signing of a credit facility for 15 billion euros ($16.1 billion).



Airbus added it was withdrawing its 2020 financial guidance, dropping a proposed 2019 dividend that had a cash value of 1.4 billion euros ($1.5 billion) and suspending funding to top up staff pension schemes.

Its U.S. rival Boeing <BA.N> is under similar pressure and has called for a $60 billion lifeline for the U.S. industry.

TRAVEL CURBS

Australia and New Zealand both warned against non-essential domestic travel, while the UAE halted flights and Hong Kong, Singapore and Taiwan took steps to ban foreign transit passengers.

"What we have to do is take care of the institutions and people's livelihoods, the soft capital, so that we can restart effectively in a timely way when the time comes," Herdman said.

The UAE, home to major carriers Emirates [EMIRA.UL] and Etihad Airways, said it would suspend all passenger flights and airport transit for two weeks to help rein in the virus.

The UAE's decision takes effect in 48 hours, with cargo and emergency evacuation flights exempted. Emirates responded by saying it would temporarily suspend all passenger services for two weeks from March 25.

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A Singapore Airlines plane sits on the tarmac at Singapore's Changi Airport March 11, 2020. Picture taken March 11, 2020. REUTERS/Edgar Su/File Photo

Singapore Airlines <SIAL.SI> grounded most of its fleet after the Asian city-state banned entry or transit by short-term visitors on Sunday.

"This is the greatest challenge in the SIA Group's existence," Chief Executive Goh Choon Phong said in a memo to staff.

The group said it had reached agreements with unions on a set of cost-cutting measures, including unpaid leave, affecting about 10,000 staff. The chief executive is taking a 30% salary cut from the start of April.

The airline normally relies heavily on connecting passengers from markets such as Australia to Europe, and India to North America through its Singapore hub.

Taiwan announced similar travel curbs that will hit China Airlines Ltd <2610.TW> and EVA Airways Corp <2618.TW>, which have marketed Taipei as a convenient and affordable transit airport, competing with Hong Kong and Singapore.

In Hong Kong, Cathay Pacific Airways Ltd <0293.HK> has cut its passenger capacity by 96% in April and May as government restrictions hit travel.

GOING SOUTH

In the southern hemisphere, Qantas Airways Ltd <QAN.AX>, Virgin Australia Holdings Ltd <VAH.AX> and Air New Zealand Ltd <AIR.NZ> were re-examining schedules after their governments advised against non-essential domestic travel.

Regional Express Holdings Ltd (REX) <REX.AX>, which serves remote Australian towns, said it would shut all operations, except some subsidized routes, from April 6, unless governments quickly expressed a willingness to underwrite its losses.

In mainland China, domestic capacity has been rising as some internal curbs are eased, but there are concerns that passengers on international flights could re-import the virus.

China's aviation regulator said all international flights due to arrive in the capital will be diverted to other airports from Monday.

($1=1.7483 Australian dollars)

($1 = 0.9340 euros)

(Reporting by Jamie Freed; Additional reporting by Alexander Cornwell in Dubai, Stella Qiu in Beijing, Ben Blanchard in Taipei, David Shepardson in Washington and Sudip Kar-Gupta and Laura Marchioro in Paris; Writing by Alexander Smith; Editing by Lincoln Feast, Clarence Fernandez and Keith Weir)

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