The unprecedented crisis in the aviation industry is developing rapidly, and the industry does not believe that the airlines will survive the outbreak of coronavirus without the help of government and taxpayer money. About it writes BBC.
First Asia, then Europe and the United States slammed the air gate in the hope to stop the epidemic. Most of the airlines was forced to reduce flights to a minimum. The planes are on the ground, the tickets are not sold. But the salary and debts still have to pay.
Pace aviation will not last long — the first of bankruptcies can be expected to fly, warn the experts and airline executives. Monday, March 16, three of the Alliance, which account for half the world fleet, in a joint statement, asked for support from authorities and airports.
“It is extraordinary times require extraordinary measures — do not skimp on the epithets of the leaders of the oneworld, SkyTeam and Star Alliance. — An unprecedented situation caused by the outbreak of coronavirus, is a deadly threat to the aviation industry.”
Some believe that current restrictions on flights in the world will cause serious damage only in the case that will last more than two or three months. Others are set in panic.
“By the end of may most of the airlines in the world are bankrupt. Government and industry must act in concert and without delay, if we are to avoid catastrophe,” wrote industry portal Centre for Aviation (CAPA).
How can we help?
The authorities of the United States, France, Germany, great Britain, Norway, the Netherlands, Brazil and Russia, among others, have already promised to help aviators, but has not yet decided exactly how.
The airlines themselves asked governments for tax breaks and exemptions: reduction in fees from passengers or flights. And airports — discounts on Parking are forced to idle aircraft.
So far they have only suspended the rules of slot allocation at airports, which oblige to use them on 80%. To save them, airlines drove a half-empty planes, and their protests gradually joined the fighters against global warming. Authorities went to meet him.
The American FAA was exempted from this rule slots at seven airports until may 31. The EU has suspended him until June for flights to Asia, but promised to do the same for other routes. Now the EU authorities make this decision.
Another request of the European carriers, they have not yet heard: to delay the introduction of new fuel surcharges and other taxes designed to encourage the transition of Europe to a greener future.
“European airlines are facing very difficult times, and obviously, for the survival of the industry will require concerted support from the authorities,” said Johan Lundgren, the head of EasyJet, one of the five largest carriers in the Old world.
His colleagues excitedly share their concerns. Here’s what they said in the last days.
Finnair chief Topi manner: “it is Now clear that the coronavirus is the most serious crisis in the history of aviation”.
The head of British Airways Alex Cruz: “the aviation industry is faced with global crisis, it is worse than Sars and 9/11 (terrorist attacks in USA on 11 September 2001). We are no longer able to maintain the current level of employment, and we will have to cut jobs: maybe briefly, maybe not.”
Delta chief ed Bastian: “Never before have we witnessed such a rapid decline in demand.”
The head of IAG (owner of British Airways, Iberia, Vueling and Aer Lingus) Willie Walsh: “we Have a serious drop in the number of bookings to all destinations and all airlines, and we expect that demand will remain sluggish at least until mid-summer.”
The head of IATA (International air transport Association) Alexander de Juniac: “Follow bankruptcy depends on the duration and intensity of the crisis. If the decline to be as significant as it is now, and will last more than two or three months, then airlines will face difficulties”.
Richard Moriarty, head of the British civil aviation authority (Civil Aviation Authority): “With such difficulties, the aviation and tourism industry has never faced. And the longer it continues, the lower the chances of survival for some companies.”
Who will survive?
Not all pray for help.
First, the problem arose from heavily indebted companies. Some of them the crisis in a stage of active expansion of business, and competitors, which they wanted to move, will lobby against the carpeted irrigation industry with taxpayers ‘ money.
Richard Branson, who owns Virgin Atlantic, offered to the British government to support the airlines with benefits and credits of nearly $10 billion.
However, IAG, which owns competing with British Airways, immediately opposed the subsidies — it has a solid safety cushion in the form of $11 billion of cash, and it has successfully persuaded authorities to rescue the first victim of the crisis — regional Flybe.
“In this crisis trump cash,” says Michael Duff of The Airline Analyst.
In his opinion, the major airlines flying the lucrative TRANS-Atlantic routes, will survive the crisis if it will last from three to six months.
“But the minor players as well as regional airlines and national carriers in Europe are facing the threat of extinction,” he says.
Western countries have to stand United and to support the airline, otherwise the industry will rise from the ashes of the current crisis in a completely different configuration, say analysts at the Centre for Aviation.
The winners will be the airlines, backed by the state, burdened by geopolitical ambitions. Like China or Arab countries. The Americans, with the support of influential trade unions will probably achieve subsidies. Some European countries will support their own.
“But the private airlines are the prospects not so rosy”, — dobavlyayut experts Centre for Aviation and warning that a world in which there will be only major and national airlines, threat to competition, consumers and the tourism industry.
The international air transport Association (IATA) estimates the reduction in turnover of the airlines due to the outbreak of the virus in $113 billion in 2020. But just a couple of months ago, she promised them a revenue growth of 4% to $870 billion and a profit of $30 billion.
Income nobody remembers, just to survive.
Affects not only the airline. The Association of European airports reported that last week, the passenger traffic decreased by half after the fall quarter a week earlier. In January-March, they will miss more than 100 million passengers and 2 billion euros ($2.2 billion) of revenue.