CORONA VIRUS CRIPPLES GLOBAL AVIATION
IT IS NO surprise that the industry clobbered hardest by the covid-19 pandemic is the one responsible for helping spread it to the four corners of the Earth. But the speed and depth of the nosedive which airlines have taken is nevertheless breathtaking. In a memo to staff on March 13th, entitled “The Survival of British Airways”, the carrier’s boss, Alex Cruz, spoke of “a crisis of global proportions like no other we have known. Most of the industry should pull through if the situation lasts one or two quarters. Any longer, and the future of air travel could be altered for good.
Already some of the heavyweights in the industry are pulling the plug on operations till the situation returns to normalcy. In tweets shared on their social media platforms they state the period when they will cease operations or the degree of their scaling down of operations.
The immediate pain is evident. European and American carriers’ share prices have declined faster even than the globe’s covid – struck stock markets. Revenues are in free fall as travel restrictions mount and as fear of infection puts people off spending hours with others in enclosed spaces. On March 5th the International Air Transport Association (IATA), a trade group, projected a possible hit to worldwide revenues of up to $113bn this year. That is one-fifth of last year’s overall revenues and four times higher than IATA estimated in February, when the corona virus was still believed to be a Chinese problem rather than a global one.
Some airlines were not as fortunate and below is a short mention of the airlines that I could compile that have since gone under. FlyBe went insolvent at the beginning of the corona virus bite in Europe. It was already facing viabilty issues and the corona virus pandemic put the last nail on the coffin for the airline.
In the USA Trans States Airlines, a Missouri-based regional airline that flies routes for United Airlines under the United Express brand had already been planning to shut down by the end of 2020, consolidating its operations with ExpressJet Airlines, another of United’s regional carrier. The pandemic just fast tracked its closure along with another US airline Compass Airlines — also owned by Trans States Holdings — which will also shut down in April. Compass is another regional carrier, which operates flights for American Airlines under its American Eagle brand. With American Airlines cutting domestic capacity by up to 80% by May, it’s had less of a need for contract airlines.
Since IATA’s revision of the industry from the pandemic’s onset things have gotten worse. Lucrative transatlantic routes, which earned airlines around $20bn in sales last year, have been hit by President Donald Trump’s 30-day ban on most flights to America from Europe, which took effect on March 14th. Delta Airlines, an American carrier, said it may have to trim international schedules by 40%, up from a 25% reduction before the ban which has now risen to 90%. Lufthansa, Europe’s biggest carrier, had already cut flights in half for April. “As more countries impose travel restrictions, the German airline may need to thin schedules by 90%”, reckons analysts at Bernstein, a research firm. Others that serve smallish domestic markets and rely on global interconnections may need to shut down altogether.
In Europe, the situation for the sector is increasingly dire.
Norwegian Air, which has built up large debts to establish itself as a low-cost transatlantic operator, said on Saturday that it had “weeks not months” to avert collapse.
KLM, the Dutch subsidiary of Air France-KLM, plans to slash up to 2,000 jobs, cut working hours by one-third for its entire staff and ask for government support.
German flagship carrier Lufthansa said on Friday it was considering a request for state aid.
Below are some images of the many airlines that have since grounded their entire fleet due to the global corona virus pandemic.
Stay at home, wash hands regularly and practice social distance to be safe. Only fly when its absolutely necessary.
AirMan – The Flying Mate