European airlines have been reacting to the fast-moving and unprecedented disruption caused by the COVID-19 Coronavirus outbreak with plans to cut capacity by as much as 90 per cent and others, including Ryanair, saying they had not ruled out grounding their entire fleets in the coming days. Share prices in various airline groups tumbled as the markets reacted to the news.
Airline after airline provided updates on Monday morning, including from the likes of IAG which owns British Airways, Aer Lingus and Iberia, and the Air France-KLM group, Finnair, Ryanair, SAS and the pan-European TUI holiday group.
IAG said it would cut capacity by an estimated 75 per cent in both April and May, and outgoing chief executive Willie Walsh has decided to delay his retirement in order to steer the group who the crisis. Luis Gallego, who was set to take over Walsh’s role will remain in charge at Iberia as the airline plans a rumoured stoppage of all operations.
Walsh said the group was grounding aircraft, freezing recruitment, temporarily suspending employment contracts and reducing working hours for large swathes of its employees in the UK, Ireland and Spain, as well as around the world.
He warned that demand would remain weak until late summer.
Europe’s largest low-cost airline, Ryanair said it was cutting capacity by 80 per cent and had not ruled out a full grounding of its entire fleet.
“We are working with our people and our unions across all EU countries to address this extraordinary and unprecedented Covid-19 event, the impact and duration of which is, at this time, impossible to determine,” the airline said in a statement released on Monday morning.
But Chief executive, Michael O’Leary predicted that a “return to normality” would come about “sooner rather than later as EU Governments take unprecedented action to restrict the spread of Covid-19”.
The Air France-KLM Group said it was grounding its entire Airbus A380 and Boeing 747 fleets as the two airlines prepare to cut capacity by between 70 and 90 per cent. The Franco-Dutch airline group welcomed announcements from both the French and Dutch governments that they were “studying all possible means to support the group”.
Finnair has cancelled all but 14 routes, four of which are domestic services. The only long-haul flight remaining is Tokyo and says it hopes to add six more short-haul services as soon as travel restrictions are lifted.
“We continue to follow the situation closely, adding routes and frequencies to the traffic program as demand returns,” explained Finnair’s chief executive Topi Manner. “We hope to be able to return to normal operations as soon as the coronavirus situation alleviates.”
Scandinavian airline SAS said it too would suspend the majority of its operations, resulting in temporarily laying off 10,000 employees or 90 per cent of its entire workforce.
Last week, the World Health Organisation (WHO) declared Europe the epicentre of the COVID-19 pandemic. Countries across the continent have been hit with travel bans or implemented their own border closures to slow the spread of the virus.
