European carriers enter dark time as flight cuts bite

By Zhang Hongpei Source:Global Times Published: 2020/3/17 22:48:40

Photo: VCG

With the coronavirus spreading globally and more governments taking drastic measures to combat the pandemic, a growing number of airlines are facing their darkest hour. 

Industry insiders said that European countries, which take self-protection measures to shut down the borders, will send the airlines into a disaster. 

It is obviously that the Chinese mainland's civil aviation industry is recovering, but European carriers are starting to decline and the worst is yet to come, Zheng Hongfeng, CEO of VariFlight, one of China's top air data service firms, told the Global Times on Tuesday, citing data of the real-time dynamic indicators of how the novel coronavirus is affecting airlines' operations.

He explained that the growth and recovery of the mainland's civil aviation industry is driven by domestic demand, although the international routes have been declining due to the pandemic.

Because European countries have different airline recovery policies, it may take longer to recover than the mainland's flights. Also, affected by the policies of the US and Canada, most profitable Atlantic routes connecting Europe and the US have also begun to decline, which is even worse, he explained.

US President Donald Trump announced last week a 30-day ban on foreign visitors from most of Europe in a bid to curb the virus spread, casting more shadows on the bleeding global aviation industry. 

Airline SAS, the largest airline in Scandinavia and the flag carrier of Norway, Sweden and Denmark, said it will temporarily halt most of its traffic from Monday, which would trigger temporary lay-offs of up to 10,000 employees, or 90 percent of the airline's total workforce, according to Reuters.

US airlines are seeking over $50 billion in financial assistance from the government, more than three times the size of the industry's bailout after the September 11 attacks, the Wall Street Journal reported Monday.

A report by aviation and travel market intelligence provider CAPA-Centre for Aviation showed Monday that as the impact of the coronavirus and multiple government travel reactions sweep through the world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.

"By the end of May 2020, most airlines in the world will be bankrupt," said CAPA.

Hong Kong-based Cathay Pacific Group reported declines in passengers and cargo in February, as overall passenger numbers fell 64 percent year-on-year, and cargo and mail carried by the two airlines under the group last month fell 6.9 percent compared with the same month last year.

"Given the expected further drop in travel demand, we are planning to only operate a bare skeleton passenger flight schedule for April, which represents up to 90 percent capacity reduction," said Cathay Pacific Group chief customer and commercial officer Ronald Lam. 


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