Skift Take

Airport hubs are now a shadow of their former selves as the coronavirus spreads turbulence across the global airline industry. Can it get any worse?

Airlines cancelled more flights on Monday, as Australia and New Zealand warned against non-essential domestic travel, the United Arab Emirates halted flights for two weeks and Singapore and Taiwan banned foreign transit passengers in the coronavirus battle.

As demand evaporates, the number of scheduled flights last week was down more than 12 percent globally from the year earlier, flight data provider OAG said, with many airlines having announced further cuts to come.

“It is a war against a virus,” Andrew Herdman, director general of the Association of Asia Pacific Airlines, told Reuters in a telephone interview.

“What we have to do is take care of the institutions and people’s livelihoods, the soft capital, so that we can restart effectively in a timely way when the time comes.”

Ratings agency Moody’s estimated global capacity would fall by 25 percent to 35 percent this year, assuming the spread of the virus slowed by the end of June.

The United Arab Emirates, home to major carriers Emirates and Etihad Airways, said it would suspend all passenger flights and airport transit for two weeks to help rein in the virus.

The decision takes effect in 48 hours, it added, with cargo and emergency evacuation flights exempted. Emirates said on its website it would temporarily suspend all passenger services for two weeks starting March 25 due to the government directive.

Singapore Airlines had been planning to halve its international capacity before the Asian city-state banned entry or transit by short-term visitors on Sunday.

It said that up to a cut of 96 percent through at least the end of April, responding to what the carrier on Monday called the greatest challenge it has faced in its existence.

“Without a domestic segment, the group’s airlines become more vulnerable when international markets increasingly restrict the free movement of people or ban air travel altogether,” it said, announcing plans to ground most of its fleet.

The airline normally relies heavily on connecting passengers from markets such as Australia to Europe and India to North America through its hub.

Singapore Airlines would look to defer aircraft deliveries and has drawn on lines of credit to meet immediate cashflow requirements, it added.

Taiwan announced similar curbs that will hit China Airlines and Eva Airways Corp, which have marketed Taipei as a convenient and affordable transit airport, competing with Hong Kong and Singapore.

In Hong Kong, Cathay Pacific Airways has cut its passenger capacity by 96 percent in April and May as government curbs hit travel.

Planemaker Airbus announced new steps to bolster its financial position, including the signing of a credit facility for 15 billion euros ($16.1 billion).

Airbus added it was withdrawing its 2020 financial guidance, dropping a proposed 2019 dividend that had a cash value of 1.4 billion euros and suspending funding to top up staff pension schemes.

In the southern hemisphere, Qantas Airways, Virgin Australia Holdings and Air New Zealand were re-examining domestic schedules after their governments advised against non-essential domestic travel.

Regional Express Holdings, which serves remote Australian towns, said it would shut all operations, except some subsidized routes, from April 6, unless governments quickly expressed a willingness to underwrite its losses.

Australia’s largest airport operator, Sydney Airport Holdings, wants to cut capital spending from a forecast A$350 million to A$450 million ($200 to $257 million), so as to focus only on critical projects, it said on Monday.

In Hawaii, which ordered 14 days in quarantine for all arrivals from Thursday, Hawaiian Airlines said it would suspend most long-haul passenger services except for a daily flight from Honolulu to Los Angeles and a weekly flight to American Samoa.

In mainland China, the first to have been hit by the virus, domestic capacity has been rising as some internal curbs are eased, but there are concerns that passengers on international flights could re-import the virus.

China’s aviation regulator said all international flights due to arrive in the capital will be diverted from Monday to other airports in the country.

More than 570,000 flights to, from and within, China alone were cancelled from Jan. 1 to March 16, flight data provider Cirium says.

(Reporting by Jamie Freed; Additional reporting by Alexander Cornwell in Dubai, Stella Qiu in Beijing, Ben Blanchard in Taipei, David Shepardson in Washington and Sudip Kar-Gupta and Laura Marchioro in Paris; Editing by Lincoln Feast and Clarence Fernandez)

This article was written by Jamie Freed from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].


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Tags: airports, coronavirus, travel bans

Photo credit: The United Arab Emirates, home to the world's busiest international airport, is suspending all passenger and transit flights for two weeks to stymie the spread of the new coronavirus. Jon Gambrell / Associated Press

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