Airlines plead for help as cancelations keep coming

March 17, 2020
Photo: Frankfurt Airport

Airlines globally have renewed calls for government assistance as capacity cuts, groundings and layoffs due to travel restrictions and falling demand keep coming.

Lufthansa Group announced overnight it was suspending all flights by Austrian Airlines from March 19 to March 28 as it again reduced group long-haul seating capacity.

By March 17, the European airline group’s schedule will be just 10 percent of its originally planned capacity on long-haul routes and 20 percent on short-haul routes.

Norwegian Air will temporarily lay off 7300 staff as it moves to cancel 85 percent of its flights.

READ: United to halve capacity as some carriers halt international flying.

“What our industry is now facing is unprecedented and critical as we are approaching a scenario where most of our airplanes will be temporarily grounded,’’ Norwegian chief executive Jacob Schram said.

In Italy, the government is set to take control of Alitalia as the loss-making carrier faces failure.

Airlines across the world have been cutting capacity as demand slumps and government restrictions attempting to slow the spread of the COVID-19 pandemic make maintaining services impractical.

Norwegian is fortunate in that it has a government which has pledged to assist the aviation industry.

“Several governments in Europe have already said they will do everything they can to ensure that their airlines can continue to fly when society returns to normalcy,’’ Schram said.

“We appreciate that the authorities of Norway have communicated that they will implement all necessary measures to protect aviation in Norway, consequently securing crucial infrastructure and jobs.”

Not all jurisdictions have been as quick off the mark, prompting the International Air Transport Association, regional airline associations and the major airline alliance to call for action.

A joint statement from oneworld, SkyTeam and Star Alliance called on governments and stakeholders to “take action to alleviate the unprecedented challenges faced by the global airline industry” during the pandemic.

The alliances, representing 60 airlines, strongly supported IATA’s call to have landing and take-off slot usage rules suspended for the northern summer season.

Some regulators, such as those in the US and Europe, have already suspended the “use it or lose it” slot rules but the alliances want others to follow.

IATA had estimated COVID-19 would cost airlines up to $US113 billion in lost revenue but that was before the restrictions announced by US President Donald Trump and other countries such as Australia and New Zealand.

“US restrictions on passengers from the Schengen Area will place pressure on the US-Schengen market, valued at over $US 20 billion in 2019,’’ the alliances said.

“To alleviate the immense pressures faced by airlines in the current operating environment, and in support of IATA’s statement on March 12, the three alliances urge governments worldwide to prepare for the broad economic effects from actions taken by states to contain the spread of COVID-19, and to evaluate all possible means to assist the airline industry during this unprecedented period.

“The alliances also call on other stakeholders to provide support. For example, airport operators are urged to evaluate landing charges and fees to mitigate the financial pressure faced by airlines due to a severe decline in passenger demand.”

There was a similar message from Airlines for America (A4A), which described the rapidly evolving situation as “extremely fluid”.

A4A wants a combination of grants, loans and tax relief to protect the 750,000 direct and 10 million indirect jobs supported by the airline industry.

“The rapid spread of COVID-19, along with the government and business-imposed restrictions on air travel, are having an unprecedented and debilitating impact on US airlines,’’ it said.

“Carriers have seen a dramatic decline in demand, which is getting worse by the day. Carriers have been forced to remove flights from their schedule and make historic capacity cuts.

“Cancelations are spiking, and for US carriers those cancelations are outpacing new bookings.

“The economic impact on U.S. airlines, their employees, travelers and the shipping public is staggering.

“This crisis hit a previously robust, healthy industry at lightning speed and we remain concerned that the impacts of this crisis will continue to worsen.”

A4A said US carriers needed immediate assistance in an economic environment that was “simply not sustainable”.

“This is compounded by the fact that the crisis does not appear to have an end in sight,’’ it said.