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Coronavirus: Airlines slash more flights | Coronavirus: Airlines slash more flights |
(about 1 hour later) | |
Travel restrictions and a slump in demand as a result of the coronavirus pandemic have forced airlines to lay off staff and cut more flights. | |
On Monday, British Airways owner IAG said it planned to cut capacity by at least 75% in April and May. | |
IAG boss Willie Walsh, who was due to step down this month, will now stay in his post to manage the crisis. | IAG boss Willie Walsh, who was due to step down this month, will now stay in his post to manage the crisis. |
Meanwhile, EasyJet said it may have to ground most of its planes as a result of travel bans and falling demand. | Meanwhile, EasyJet said it may have to ground most of its planes as a result of travel bans and falling demand. |
The no-frills airline said it had cancelled a "further significant" number of flights. | |
"These actions will continue on a rolling basis for the foreseeable future and could result in the grounding of the majority of the EasyJet fleet," it said. | "These actions will continue on a rolling basis for the foreseeable future and could result in the grounding of the majority of the EasyJet fleet," it said. |
The announcements hit the airlines' share prices, with EasyJet down nearly 30% and IAG dropping by about 20%. | |
'Precarious future' | 'Precarious future' |
EasyJet chief executive Johan Lundgren called for government intervention to support the aviation industry. | |
"European aviation faces a precarious future and it is clear that co-ordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over," he said. | "European aviation faces a precarious future and it is clear that co-ordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over," he said. |
Meanwhile, IAG boss Mr Walsh said: "We have seen a substantial decline in bookings across our airlines and global network over the past few weeks and we expect demand to remain weak until well into the summer." | Meanwhile, IAG boss Mr Walsh said: "We have seen a substantial decline in bookings across our airlines and global network over the past few weeks and we expect demand to remain weak until well into the summer." |
"We are therefore making significant reductions to our flying schedules," he said, adding that the group had the flexibility to make further cuts if necessary. | "We are therefore making significant reductions to our flying schedules," he said, adding that the group had the flexibility to make further cuts if necessary. |
The boss of BA had already told staff that it planned to ground flights "like never before" and lay off employees in response to the coronavirus. | |
In a memo to staff titled "The Survival of British Airways", Alex Cruz warned that the airline industry was facing a "crisis of global proportions" that was worse than that caused by the Sars virus or 9/11. | |
IAG - which also owns Iberia and Aer Lingus - said it had suspended flights to China, reduced capacity on Asian routes, cancelled all flights to, from and within Italy as well as making other changes to its network. | IAG - which also owns Iberia and Aer Lingus - said it had suspended flights to China, reduced capacity on Asian routes, cancelled all flights to, from and within Italy as well as making other changes to its network. |
Meanwhile, bosses at Virgin Atlantic said they would write to the prime minister on Monday to ask for emergency financial measures for airlines in the UK. | |
The company will be significantly affected by US travel restrictions, which will hit all transatlantic routes from Tuesday. | |
Should the governments bail British airlines out? | |
The coronavirus has hit them hard and Virgin Atlantic, the airline founded and still part-owned by Sir Richard Branson, has called for government cash - support totalling perhaps £7.5bn to tide the sector over. | |
But airlines are not speaking with one voice. IAG, the owner of British Airways, has pointedly not asked for a bailout, and this morning went out of its way to point to its substantial cash reserves - more than £9bn in total. | |
A senior source at IAG told me that there were "better uses" for taxpayer's money than bailing out airlines - a thinly-veiled jibe at Virgin Atlantic. | |
IAG's chief executive, Willie Walsh, was vociferous in his opposition to a bail out for Flybe, and it's clear he will also fight a handout for Virgin Atlantic, which is BA's direct competitor on lucrative routes out of Heathrow. | |
What will the government do? | |
A one-off intervention to save a single airline would be unusual, but airline experts say across the board help - the suspension of air passenger duty and time to pay on National Insurance and tax - are likely. | |
Over the weekend, Scandinavian airline SAS said it would temporarily halt most of its flights until conditions for commercial aviation improved. | Over the weekend, Scandinavian airline SAS said it would temporarily halt most of its flights until conditions for commercial aviation improved. |
As a result, the airline said it would temporarily lay off up to 10,000 employees, or 90% of its total workforce. | As a result, the airline said it would temporarily lay off up to 10,000 employees, or 90% of its total workforce. |
Last week, Norwegian airlines said it would cancel 4,000 flights and temporarily lay off about half of its staff because of the coronavirus outbreak. | Last week, Norwegian airlines said it would cancel 4,000 flights and temporarily lay off about half of its staff because of the coronavirus outbreak. |
Aviation analyst Chris Tarry told the BBC those kind of staff reductions could lead to a permanent change. | Aviation analyst Chris Tarry told the BBC those kind of staff reductions could lead to a permanent change. |
"We are going to see shrinkage," he told the BBC's Today programme. | "We are going to see shrinkage," he told the BBC's Today programme. |
"We've seen airlines talk about voluntary redundancies then we move into the next stage of that, which is permanent reductions." | "We've seen airlines talk about voluntary redundancies then we move into the next stage of that, which is permanent reductions." |