Airlines globally see revenue plummet due to coronavirus that racks up bills
THE International Air Transport Association (IATA) predicts the coronavirus will cause total revenue losses for commercial airlines of between US$63 billion and $113 billion, depending on how the virus spreads
THE International Air Transport Association (IATA) predicts the coronavirus will cause total revenue losses for commercial airlines of between US$63 billion and $113 billion, depending on how the virus spreads.
The losses are much larger than the US$30 billion estimated two weeks ago when the virus was largely confined to China.
The warning comes as UK regional airline Flybe, which received some emergency funding from Virgin Atlantic last year, said the coronavirus was partly to blame for its collapse. It went into bankruptcy, leaving passengers stranded at airports, American Shipper reported.
Airlines around the world have suspended most flights to mainland China and reduced flight schedules throughout Asia, Italy and other destinations, mostly to cut costs due to the steep fall off in corporate and leisure travel bookings and some travel restrictions imposed by governments.
Deutsche Lufthansa AG cancelled all group flights to Israel as of March 8 because authorities there have banned entry of travellers from Austria, Germany and Switzerland. The halt in operations covers Lufthansa, SWISS and Austrian Airlines through March 28. Together the three airlines operate ten daily flights to Tel Aviv and one to Eilat.
On March 4 Delta Air Lines pruned the number of flights it operates between the US and Japan.
Lufthansa has aggressively moved to cut operating costs to minimise profit damage. Through March it will cancel 7,100 flights, many on domestic routes and to Iran and Italy. Route cancellations amount to one-quarter of seat capacity, the equivalent of 125-short-and-medium haul aircraft and 25 long-haul aircraft.
The German airline has temporarily stored 23 aircraft. And the airline is reducing labour costs through unpaid leave, reduced hours and a hiring hiatus.
United Airlines announced it was reducing its international schedule by 20 per cent in April and May, plus its US and Canadian schedules by ten per cent. It is also offering voluntary unpaid leaves and select reductions in work schedules, has implemented a hiring freeze through mid-summer, suspended management and administrative pay increases, and postponed training classes.
US Customs and Border Protection postponed its annual Trade Symposium, scheduled for March 10-11 in Anaheim, California, and the timing of the TPM container shipping event in Long Beach, California and IATA's World Cargo Symposium in Istanbul March 10-12 has been changed.
Amazon and Netflix now say they are pulling out of the South by Southwest music and tech festival in Austin, Texas, as the coronavirus spreads in the US. Previously, Facebook, Intel and Twitter all said they would not participate.