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COVID-19: update on the airline situation, from flight cancellations to bankruptcy
18
March
Aviation

The coronavirus spread is increasingly affecting business activities in the Aerospace & Defense industries. At the forefront are the airlines. According to a press release from the IATA, released on March 5, the COVID-19 virus could cost the sector between $ 63 and 113 billion in total. 

In general, the whole activity and finances of air carriers are being damaged by the coronavirus epidemic. The announcements have followed one another since the beginning of March, the drop in the number of travelers weighing on the companies and forcing them to reduce their capacities.

 

Air France:

The national company is already reducing all non-operational expenses, freezing new hires. Air France had to cancel more than 3,600 flights worldwide, a reduction from the initial plan of 13% of capacity on the long-haul network, 25% on the European network and 17% on the network. Domesticated.

British Airways:

British Airways still cancels a few more flights: The British airliner, has already warned that to “adapt to the drop-in demand due to the coronavirus”, it was going to cancel about 200 flights between March 16 and 28. The IAG group will reduce the airfoil by 75%: The airlines of the British Airways group, Iberia, Aer Lingus and the low cost Vueling and Level will reduce their capacity by 75% in April and May, responding to the drop-in demand created by the Covid-19 pandemic.

 

American Airlines:

American Airlines is suspending three out of four long-distance international routes, effective May 6. It is going to ground her entire fleet of jumbo jets to the ground. Domestic flights are not spared: the American company plans to reduce its service to the United States by 20% in April and 30% in May. Outright cancellation of growth targets: Estimated 75-100% drop in demand on transpacific routes. No growth expected before 2021.

 

Korean Air:

Carrier’s President says about 100 of his 145 planes are now grounded at his base in Seoul-Incheon and other airports across the country. And if the situation persists for a longer period of time, “we could reach the threshold where we cannot guarantee the survival of the business.” 

 

Alitalia: 

On the verge of bankruptcy, the airline Alitalia will be nationalized: The Council of Ministers “provides for the constitution of a new company entirely controlled by the Ministry of Economy and Finance, or controlled by a company with majority public participation, even indirect ” According to media reports, Rome has planned a global envelope of 600 million euros for the entire national aviation sector, in which Alitalia represents the lion’s share.

 

EasyJet: 

EasyJet warned that “the majority of its planes” could be grounded: It says it fears for the survival of the airlines in the event of long-term travel freeze. To mitigate the impact of the coronavirus, management is already talking about cost management in several areas, by listing several actions: a freeze on recruitments, promotions and salary increases, an offer of unpaid leave and the reallocation of aircraft for summer 2020.

 

alex.roman@surfeo.eu           

Office: +33 (1) 55 17 14 68

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