Time is ticking away for airlines across the world. Of course some are in a better state financially than others but in reality the industry needs governments to step in and offer help.
The owner of British Airways and easyJet, Europe’s no.3 and no.4 airlines, said they would ground aircraft on an unprecedented scale in a battle to survive the travel restrictions and European lockdowns now convulsing the industry.
Britain’s government said it would discuss how to protect the industry from the coronavirus pandemic after easyJet on Monday joined Virgin Atlantic in calling for government help as people across the world stop travelling.
“European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over,” easyJet’s CEO Johan Lundgren said in a statement.
BA-owner IAG stopped short of asking for government backing, however. IAG’s CEO Willie Walsh has long-opposed any government help for airlines.
He was due to retire later this month, but it was announced on Monday that he would defer his retirement for a few months to provide stability during this challenging time.
IAG said it would cut its flying capacity by at least 75% in April and May, while easyJet said it could ground the majority of its fleet on a rolling basis. The airlines are the no.3 and no.4 European carriers on a passenger number basis.
Both airlines said they had strong balance sheets, providing details on their cash positions and credit facilities.
IAG, which also owns Iberia and Aer Lingus, said it had total liquidity of 9.3 billion euros, while easyJet said it had 1.6 billion pounds of cash plus an undrawn $500 million revolving credit facility.
Both airlines said they could not provide profit guidance for their current financial years. IAG also detailed cost cuts including a freeze on discretionary spending, working hours reductions and a temporary suspension of employment contracts.
Copyright (2020) Thomson Reuters. Click for restrictions
Subscribe to Skift Pro
Subscribe to Skift Pro to get unlimited access to stories like these ($30/month)Subscribe Now
Photo Credit: An EasyJet aircraft. Airlines are struggling to deal with the coronavirus outbreak. James / Flickr
Blackstone’s $305 Million Hotel Grab Shines Light on Acquisition Climate
Major real estate and investment groups like Blackstone and MCR Hotels will garner the most headlines around hotel acquisitions coming out of the pandemic. There's simply not enough brands out there for a company like Marriott to make a splash on the M&A front.
Cameron Sperance | 22 hours ago
Cuba Starts Staggered Reopening Ahead of Tourist High Season
The goal is to vaccinate 90 percent of Cubans by mid-November. If officials hit that goal, tourism-related businesses will breathe a huge sigh of relief in anticipation of visitors returning to the island.
Nelson Acosta Writing by Sarah Marsh, Reuters | 2 days ago