While the European plane making giant Airbus is temporarily halting production at two of its production sites in order to address health and safety of its employees in the wake of the coronavirus pandemic in Europe, Boeing and other aviation companies in the United States are seeking billions of dollars in aid in their struggle to pass through a tanking of demand because of the viral pandemic.
The imposition of travel restrictions and by various governments around the world because of the pandemic and the significant drop in demand in bookings has battered global airlines and has even raised questions about the survival of several companies in the industry.
In order to address the steep drop of demand, many airlines are trying to preserve costs by reducing flights, laying off staff, suspending dividends, selling planes and flying cargo on empty passenger jets.
“It’s now fair to call this the single biggest shock that global aviation has ever experienced,” Qantas Airways Ltd CEO Alan Joyce said in a memo to the airline’s 30,000 staff on Tuesday and reported by the media.
Discussions on providing short-term assistance for the entire US aviation sector are being held with the senior White House officials and congressional leaders, Boeing Co said on Monday. At least $58 billion in loans and grants along with additional tax changes is being sought, said US airlines and cargo carriers. Airports are also seeking $10 billion assistance package.
Calls for emergency government aid have also been made by European airlines. Last week there was a drop of about 50 per cent on the average in passenger traffic across the region. Industry trade body Airports Council International Europe said that it expects the situation to worsen with the closure of borders of various countries with the continent.
There will be a drop of at least 10.5 per cent in international travel this year – the highest fall year on year, said the industry consultancy Tourism Economics.
Production and assembly of planes and parts at its French and Spanish sites for the next four days in order to impose strict health and safety provisions, plane maker Airbus SE said on Tuesday.
The disruption to its business, especially at London Southend Airport, means that it would require additional liquidity, said British infrastructure and aviation group Stobart.
In Asia, Qantas Airlines has said that it would cut down its international flights by as much as 90 per cent and cancel about 60 per cent of its domestic flights until the end of May at least even as the company was planning to generate a few hundred million dollars by refinancing some aircraft.
“Our goal is to protect as many jobs as possible and to make sure we remain strong enough to ride this out,” Joyce told staff in the memo seen by Reuters.
After freezing hiring and halting discretionary spending, the Auckland International Airport of New Zealand now will not pay any interim dividend, the company said.
Starting in March till June 30, about 80 per cent capacity was scrapped by Air New Zealand for its flights to Australia after both the countries announced self isolation for 14 days after arrival for all travelers.
(Adapted from Reuters.com)