ANALYSIS: Airlines ground flights, count mounting costs of the coronavirus shock

March 23, 2020  17H:10  GMT/ZULU

by Selina O'Grady and Biodun Iginla, BBC News and Reuters News Analysts, London

Airlines across the globe are feeling the pain as travel demand withers because of the coronavirus outbreak, scrapping flights and ditching financial forecasts.

Below is a list of how the world’s biggest airlines have responded (in alphabetical order):

AIR FRANCE-KLM (AIRF.PA)

Air France-KLM said on March 16 it would park its biggest airliners and slash services by up to 90%. The group said it had identified measures to save 200 million euros ($223 million) in 2020 and ways to cut its capital expenditure by 350 million euros.

AIR NEW ZEALAND (AIR.NZ)

Air New Zealand said on March 16 it would cut long-haul capacity by 85% in the coming months and the domestic network by 30% in April and May.

The airline has withdrawn its full-year outlook, frozen hiring and offered unpaid leave to staff.

AMERICAN AIRLINES INC (AAL.O)

American Airlines plans to cut 75% of its international flights through May 6 and ground nearly all its widebody fleet.

CHINA SOUTHERN AIRLINES (600029.SS)

China Southern Airlines reported on March 18 a 73% drop in February passenger capacity, saying the impact from the epidemic remains uncertain.

DELTA AIR LINES DAL.O

Delta is cutting domestic capacity by 10% to 15% and international by 20% to 25%, freezing hiring, offering voluntary leave options to staff and looking at early retirement of older aircraft.

It had received over 4,500 requests from flight attendants for voluntary unpaid leave in April, according to a March 14 paper seen by Reuters.

DEUTSCHE LUFTHANSA AG (LHAG.DE)

The German carrier cut long-haul capacity by up to 90% from March 17, and said it would only operate 20% of planned intra-Europe flights.

Austrian Airlines, a part of the Lufthansa group, has halted all regular flight operations until April 19.

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EL AL ISRAEL AIRLINES (ELAL.TA)

El Al sent 5,500 of its 6,000 workers on unpaid leave until May 31 after it slashed its flight schedule.

EMIRATES

Emirates is asking pilots and cabin crew to take unpaid leave.

FINNAIR (FIA1S.HE)

On March 17, Finnair said it would cancel most of its flights until the end of June as it started transitioning to a limited network.

IAG (ICAG.L)

International Consolidated Airlines Group (IAG), the owner of British Airways and Iberia, said it would cut its flying capacity by at least 75% in April and May.

The group detailed cost cuts including a freeze on discretionary spending, working hours reductions and a temporary suspension of employment contracts.

On March 17, the UK pilot union BALPA said that British Airways was due to make an unspecified number of pilots redundant.

JETBLUE AIRWAYS CORP (JBLU.O)

JetBlue, which pulled its first-quarter and 2020 earnings forecast, said it was adjusting schedules between March and early May and was considering more flight cancellations.

JetBlue said the outbreak was expected to make at least a six percentage-point dent in its total revenue per available seat mile in the first quarter.

NORWEGIAN AIR (NWC.OL)

Norwegian Air said on March 16 it would cancel 85% of its flights and temporarily lay off 7,300 employees. The cancellations add to an already difficult financial situation at Norwegian, which has scrapped its 2020 outlook and lost 70% of its market value this year.

QANTAS AIRWAYS (QAN.AX)

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Qantas has suspended all international flights from Australia and around 60% of domestic traffic at least until end of May.

The airline said it could no longer provide guidance on the outbreak’s financial impact. Its CEO will take no salary for the rest of the year, the management team will receive no bonuses and all staff are encouraged to take paid or unpaid leave.

QATAR AIRWAYS

Qatar Airways laid off around 200 employees, all Filipino nationals based in Qatar.

RYANAIR (RYA.I)

The Irish airline said on March 16 it would ground most of its aircraft in Europe, expected to cut seat capacity by 80% for the next two months, and could even ground its entire fleet.

SAS (SAS.ST)

The Danish and Swedish governments said on March 17 they would provide guarantees totaling 3 billion Swedish crowns ($302 million) to SAS, which has grounded most of its fleet and temporarily laid off 90% of staff.

SINGAPORE AIRLINES (SIAL.SI)

Singapore Airlines on March 23 cut capacity by 96%, grounded almost its entire fleet and imposed cost cuts affecting about 10,00 staff.

SOUTHWEST AIRLINES CO (LUV.N)

Southwest, which has withdrawn its previous 2020 financial guidance, said it would reduce capacity by at least 20% from April 14 through June 5.

TAP AIRLINES [TAPA.UL]

Portugal’s flag carrier, which had previously cut 3,500 flights through May, said on March 19 it would further reduce its operations between March 23 and April 19, expecting to fly to just 15 of its 90 destinations.

UNITED AIRLINES HOLDINGS INC (UAL.O)

The Chicago-based airline said on March 20 it would slash its international schedule by 95% for April because of government restrictions prohibiting travel.

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VIRGIN ATLANTIC

Virgin Atlantic, the UK-based airline, said it would ground 75% of its fleet by 26 March and by up to 85% at points in April, as it canceled more flights.

WESTJET AIRLINES

Canada's WestJet suspended all commercial international flights for 30 days from March 22 and reduced its domestic schedule by 50%. (bit.ly/2Udcne7)

ANALYSIS: U.S. eyes aid for airlines; sees no domestic travel curbs for now

March 16, 2020  07H17  GMT/ZULU

by Rachel Rubin and Biodun Iginla, BBC News and Reuters News Analysts, Washington

WASHINGTON - U.S. Treasury Secretary Steven Mnuchin on Sunday said he was in close touch with Congress about helping U.S. airlines weather a massive downturn in business due to sweeping travel restrictions aimed at containing the coronavirus.

Mnuchin told ABC News’ “This Week” program he was talking with U.S. House of Representatives Speaker Nancy Pelosi about measures this week to help airlines and other sectors reeling from a collapse in demand due to the coronavirus pandemic.

“We need to focus on the airline industry. This is an unprecedented situation,” he told the ABC program. “The president is going to use all the tools that are in the toolbox, and we will work with Congress on a bipartisan basis.”

“The Speaker and I are already in conversations about airlines, which (are) critical to us, hotels, cruise ships, more SBA lending, more liquidity, some type of stimulus,” he added.

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Delta Air Lines Inc (DAL.N) on Sunday said it will halt service to London from Detroit and Dublin flights from New York after the White House announced it was imposing new travel restrictions on United Kingdom and Ireland.

American Airlines Inc (AAL.O) on Saturday said it plans to cut 75% of its international flights through May 6 and ground nearly all its widebody fleet.

Delta, American Air Lines and United Airlines, the three largest U.S. airlines, are in talks with the U.S. government about potential assistance, but no details have emerged.

White House economic adviser Larry Kudlow told CBS’s “Face the Nation” program the administration would discuss “a number of new proposals” for the airlines with U.S. lawmakers this week, but gave no details.

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Top U.S. infectious diseases expert Anthony Fauci on Sunday warned Americans that the coronavirus outbreak could get worse before it gets better, but said he did not expect the United States to restrict domestic travel in the near future.

Fauci, director of the National Institute of Allergy and Infectious Diseases, told ABC News’ “This Week” program he was confident the U.S. government was doing everything needed to contain the outbreak and avert a worst-case scenario.

The disease has infected some 156,465 people have been around the world, and 5,838 have died, according to a Reuters tally. The United States has reported at least 59 deaths.

Fauci told ABC that early U.S. moves to block travel from China had helped, as would new restrictions on travel from Europe. He said there had been some discussion on the president’s coronavirus task force about limiting travel within the United States, but he did not see that happening for now.

“They’ve been discussed, but not seriously,” he said. “I don’t see that right now in the immediate future. But remember, we are very open-minded about whatever it takes.”

Slideshow (6 Images)

Mnuchin told “Fox News Sunday” the government would focus on shoring up the airline, hotel and cruise ship industries, but insisted that would not amount to any kind of “bailout.”

“If you’re providing liquidity to good businesses that just need liquidity for three to six months, where you’re taking collateral and you have security, that’s not a bailout,” he said.

Laptops might be banned on all flights into and out of the US

 Mon May 29, 2017 |  03H:33  GMT/UTC/ZULU TIME

by Melissa Gruz and Biodun Iginla, BBC News and Reuters, New York

The United States might ban laptops from aircraft cabins on all flights into and out of the country as part of a ramped-up effort to protect against potential security threats, U.S. Homeland Security Secretary John Kelly said on Sunday.

In an interview on "Fox News Sunday," Kelly said the United States planned to "raise the bar" on airline security, including tightening screening of carry-on items.

"That's the thing that they are obsessed with, the terrorists, the idea of knocking down an airplane in flight, particularly if it's a U.S. carrier, particularly if it's full of U.S. people."

In March, the government imposed restrictions on large electronic devices in aircraft cabins on flights from 10 airports, including the United Arab Emirates, Qatar and Turkey.

Kelly said the move would be part of a broader airline security effort to combat what he called "a real sophisticated threat." He said no decision had been made as to the timing of any ban.

"We are still following the intelligence," he said, "and are in the process of defining this, but we're going to raise the bar generally speaking for aviation much higher than it is now."

Airlines are concerned that a broad ban on laptops may erode customer demand. But none wants an incident aboard one of its airplanes.

"Whatever comes out, we'll have to comply with," Oscar Munoz, chief executive officer of United Airlines (UAL.N), told the company's annual meeting last week.

Airlines were blindsided in January when President Donald Trump issued an executive order banning entry for 90 days to citizens from Iraq, Syria, Iran, Libya, Somalia, Sudan and Yemen, sending airlines scrambling to determine who could board and who could not. The order was later blocked in the courts.

In the case of laptops, the administration is keeping the industry in the loop. Delta Air Lines (DAL.N) said in a statement it "continues to be in close contact with the U.S. Department of Homeland Security," while Munoz applauded the administration for giving the company a "heads up."

"We've had constant updates on the subject," he said. "We know more than most. And again, if there's a credible threat out there, we need to make sure we take the appropriate measures."

MORE SCRUTINY OF CARRY-ONS

Among the enhanced security measures will likely be tighter screening of carry-on items to allow Transport Security Administration agents to discern problematic items in tightly stuffed bags.

Kelly said that in order to avoid paying fees for checking bags, people were stuffing them to the point where it was difficult to see through the clutter.

"The more stuff is in there, the less the TSA professionals that are looking at what's in those bags through the monitors can tell what's in them."

The TSA has begun testing certain new procedures at a limited number of airports, requiring people to remove additional items from carry-on bags for separate screenings.

Asked whether the government would expand such measures nationwide, Kelly said: "We might, and likely will."