Coronavirus ruins airlines: many will not reach summer without help

The unprecedented crisis in aviation is developing rapidly, and the industry no longer believes that airlines will survive the outbreak of the coronavirus without the help of the authorities and taxpayer money. Writes about it with the BBC.

Photo: Shutterstock

First, Asia, followed by Europe and the United States, closed the air gates in the hope of stopping the epidemic. Most airlines were forced to reduce flights to a minimum. Airplanes are on the ground, tickets are not for sale. But salaries and debts still have to be paid.

At this rate, aviation will not last long - the first bankruptcies can be expected by the summer, experts and airline executives warn. On Monday, March 16, the three alliances, which account for half of the world's fleet, asked for support from authorities and airports in a joint statement.

“These exceptional times require extraordinary measures,” the leaders of oneworld, SkyTeam and Star Alliance did not skimp on epithets. “The unprecedented situation caused by the coronavirus outbreak poses a mortal threat to the aviation industry.”

Some believe that the current restrictions on flights in the world will cause serious damage only if they last more than two to three months. Others are in a panicky mood.

“By the end of May, most airlines in the world will be bankrupt. Government and industry must act in concert and without delay if disaster is to be avoided,” wrote industry portal Center for Aviation (CAPA).

How can I help you?

The authorities of the USA, France, Germany, Great Britain, Norway, the Netherlands, Brazil and Russia, among others, have already promised to help the aviators, but have not yet decided which way.

On the subject: Traveling during a pandemic: what to take with you to protect against coronavirus

The airlines themselves asked governments for tax holidays and concessions: reductions in fees for passengers or overflights. And airports offer discounts on parking for forcedly idle aircraft.

So far, they have achieved only suspension of the rules for the allocation of slots at airports, which oblige them to use 80%. To save them, the airlines drove half-empty planes, and global warming fighters gradually joined their protests. The authorities went forward.

The American FAA exempted from this rule slots at seven airports until May 31. The EU suspended it until June for flights to Asia, but promised to do the same for other routes. Now the EU authorities are drawing up this decision.

They have not yet heard another request from European carriers: to postpone the introduction of new fuel surcharges and other taxes designed to stimulate the transition of Europe to a green future.

“European airlines are facing very challenging times and it is clear that the industry will need concerted support from authorities to survive,” said Johan Lundgren, chief executive of EasyJet, one of the five largest carriers in the Old World.

His colleagues are vying to share their concerns. That's what they said in the last days.

Finnair chief Topi Manner: “It is now clear that coronavirus is the most serious crisis in the history of aviation.”

British Airways CEO Alex Cruz: “Aviation is facing a global crisis worse than Sars and 9/11. We can no longer maintain current hiring levels and will have to cut jobs, maybe not for long, maybe not.”

Delta Chief Ed Bastian: “Never before have we seen such a rapid decline in demand.”

The head of IAG (owner of British Airways, Iberia, Vueling and Aer Lingus) Willie Walsh: “We have had a serious fall in bookings across all routes and across all airlines and we expect demand to remain subdued until at least mid-summer.”

The head of IATA (International Air Transport Association) Alexandre de Juniac: “Whether bankruptcies will follow depends on the duration and intensity of the crisis. If the downturn is as severe as it is now and lasts for more than two to three months, then airlines will face difficulties.”

Richard Moriarty, head of the British Civil Aviation Authority: “The aviation and tourism industry has never faced such difficulties. And the longer this goes on, the lower the chances of survival for some companies.”

Who will survive?

Not everyone is begging for help.

First of all, the problems arose with heavily loaned companies. Some of them found the crisis in the stage of active expansion of the business, and the competitors whom they wanted to move would lobby against carpet irrigation of the industry with taxpayer money.

Richard Branson, who owns the Virgin Atlantic, has proposed to the British government to support the airline with privileges and loans of almost $ 10 billion.

On the subject: 'Humanity will survive': a Nobel laureate explained why you should not panic because of a coronavirus

However, IAG, which owns rival British Airways, immediately opposed the subsidies - it has a solid safety net in the form of $11 billion in cash, and it has already successfully dissuaded the authorities from saving the first victim of the crisis - the regional Flybe.

“Cash is the trump card in this crisis,” says Michael Dough of The Airline Analyst.

In his opinion, the largest airlines flying on profitable transatlantic routes will survive the crisis if it lasts from three months to six months.

“But minor players, as well as regional airlines and national carriers in Europe, are facing the threat of extinction,” he believes.

Western countries must act as a united front and support airlines, otherwise the industry will rise from the ashes of the current crisis in a completely different configuration, Center for Aviation analysts write.

The winners will be the airlines, behind which there are states, weighed down by geopolitical ambitions. Like China or Arab countries. Americans with the support of influential unions are likely to get subsidies. Some countries in Europe will support their own.

“But the prospects for private airlines are not so bright,” add Center for Aviation experts and warn that a world in which only large and national airlines remain is dangerous for competition, consumer rights and the tourism industry.

The International Air Transport Association (IATA) estimates the reduction in airline turnover due to the outbreak of the virus at $ 113 billion in 2020. But just a couple of months ago, she promised them revenue growth of 4% to $ 870 billion dollars and a profit of $ 30 billion.

No one remembers income anymore, just to survive.

Not only airlines suffer. The Association of European Airports reported that last week, passenger traffic halved after falling a quarter a week earlier. In January-March, they missed more than 100 million passengers and 2 billion euros ($ 2,2 billion) in revenue.

Read also on ForumDaily:

Tighter quarantine: US restrictions on movement

Traveling during a pandemic: what to take with you to protect against coronavirus

Coronavirus and deportation: what to do to illegal immigrants if they get sick

Documents and data: what to prepare for hospitalization due to coronavirus

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.