Coronavirus chaos and travel concerns – UK airline collapses, aviation industry facing huge losses
The airline could be just the first to crumble, according to Willie Walsh. The boss of British Airways owner IAG says other airlines could be at risk of going under as consumer demand falls. But he warned the crisis should not be an excuse for countries to prop up failing carriers, saying: "I don’t believe it’s appropriate for governments to provide financial support to weak airlines."
Flybe had its own unique issues. A regional carrier from the UK, it has faced uncertainty from the Brexit process and high passenger duty on the domestic routes it served. It however, was not as exposed to the coronavirus risk as other airlines. It did not fly to China, the centre of the outbreak. Virgin Atlantic, which headed a consortium to rescue Flybe last year, does fly several routes to China. Those are now cancelled, with overall demand for flights halved since the crisis began. On Wednesday, the company announced more emergency measures. Executive pay has been cut, and staff are being encouraged to take unpaid leave.
The story is the same across the industry. The Lufthansa group has suspended flights from Germany, Switzerland and Austria to mainland China. It has also reduced flights to South Korea, Hong Kong and northern Italy. British Airways has cancelled transatlantic services, while U.S. President Donald Trump has been meeting airline executives responsible for much of the country's domestic market.
Many U.S. carriers, including Delta Airlines and Jet Blue, have announced they will waive ticket change and cancellation fees for passengers caught up in the crisis.
At the A4E aviation summit on March 3rd, airline bosses said the crisis is unlikely to be as bad for the industry as the aftermath of the 2001 terror attack in New York, or in 2009 during the global financial crisis. Air France-KLM CEO, Benjamin Smith, has called for plans to levy green taxes on flight to be delayed to help airlines. He said: "In view of the coronavirus outbreak, we are asking governments to suspend the introduction of new flight taxes. New taxes put extra pressure on us, for example in France and the Netherlands."
Airline executives say they are hopeful the disruption can be limited to another two or three weeks. Booking trends in Asia suggest an upturn is close by if the number of cases can be contained. But many of those at the aviation conference warned, however, that it’s likely to get a whole lot worse before it gets any better.
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