(Reuters) – Airlines made unprecedented cuts to flights, costs and staffing on Monday, stepping up calls for emergency aid as coronavirus lockdowns and new travel restrictions hit more major routes.
Already battered shares in British Airways parent IAG (ICAG.L), easyJet (EZJ.L) and Air France-KLM (AIRF.PA) plunged again as they scrapped most flights for the coming weeks, joining other major carriers that are all but halting operations in the face of the pandemic.
“It is now clear that the coronavirus is by far the biggest crisis in the history of aviation,” Finnair Chief Executive Topi Manner said, as the carrier announced a 90% capacity reduction and its second profit warning in three weeks.
The outlook darkened further after Spain declared a state of emergency and the United States extended travel curbs to Britain and Ireland, while Australia and New Zealand began requiring all travelers to self-isolate. Germany advised citizens against non-essential trips abroad.
The travel collapse threatens more bankruptcies in the wake of British carrier Flybe’s failure this month.
Troubled Norwegian Air (NWC.OL) on Monday laid off 90% of its workforce and canceled 85% of flights, while the Italian government prepared to take control of Alitalia with another cash injection of 600 million euros ($668 million).
In an unusual joint statement, the world’s three main airline alliances – oneworld, SkyTeam and Star Alliance – called for government aid to alleviate the “unprecedented challenges” faced by the industry.
U.S. officials and lawmakers view the situation with increasing alarm. United (UAL.O), American (AAL.O) and Delta Air Lines (DAL.N) are in talks with the government about potential assistance backed by pilot and flight attendants’ unions. Tax relief and federal loans are being considered, officials say.
IAG, which also owns Spain’s Iberia and Vueling, said it would cut April-May capacity by at least 75% and postpone CEO Willie Walsh’s retirement – keeping successor Luis Gallego at Iberia’s helm as the group navigates the crisis.
Besides cancelling flights, the group announced moves to freeze discretionary spending, reduce working hours and temporarily suspend employment contracts.
Budget carriers Ryanair (RYA.I) and easyJet announced plans to ground most of their fleets, with the latter echoing calls for government help.
“Coordinated government backing will be required to ensure the industry survives,” easyJet CEO Johan Lundgren said.
In Europe, IAG’s shares had fallen 25% by 1413 GMT, while Ryanair was down 18%, easyJet down 17% and Air France-KLM 17% lower. In New York, Delta was down 18%, and American 15% lower.
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