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Qantas aircraft are parked on the tarmac at Melbourne International Airport in Australia. Photo: REUTERS file
travel

Airlines slash schedules, jobs and pay after new travel restrictions

4 Comments
By Jamie Freed and Tracy Rucinski

Airlines around the world announced they would make more drastic reductions to their flying schedules, cut jobs and seek government aid after countries further tightened border restrictions due to the coronavirus.

United Airlines Holdings Inc booked $1.5 billion less revenue in March than the same time last year and warned employees that planes could be flying nearly empty into the summer, even after severe flight cuts.

United said it would cut corporate officers' salaries by 50% and reduce flight capacity by about 50% in April and May, with deep capacity cuts also expected into the summer travel period.

"This crisis is moving really quickly," United Chief Executive Oscar Munoz and President Scott Kirby said in a memo to employees on Sunday.

Things worsened over the weekend as Spain declared a state of emergency, the Trump administration added Britain and Ireland to its list of countries facing travel curbs, and Australia and New Zealand said all travellers would have to self-isolate for 14 days.

"We call on Congress and the White House to take all measures available to protect the health and payroll of American workers," said Sara Nelson, president of the Association of Flight Attendants-CWA, which represents 50,000 U.S. flight attendants at 20 airlines, including United.

UK airlines called on the British government to help ensure their survival, while Germany's Tui AG and Scandinavian carrier SAS said they would suspend the vast majority of operations due to the COVID-19 outbreak and apply for government support.

Icelandair Group hf said it was cutting capacity and working with labor unions to reduce its salary cost significantly".

Air New Zealand Ltd said job losses would be necessary as it cut long-haul capacity by 85% over the coming months. The airline will also cut flights to Australia and reduce domestic capacity by 30% in April and May.

"We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people," Air New Zealand Chief Executive Greg Foran said in a statement.

The airline has halted trading in its shares until Wednesday.

Qantas Airways Ltd said it would be making fresh cuts to its flying schedule beyond the 25% reduction in international capacity announced last week due to the new travel restrictions.

"We've moved immediately to offer a booking waiver to our customers and we're working through the implications for our schedule now given the expected impact on demand, with a view to announcing more detail as soon as possible," a Qantas spokesman said in a statement.

Qantas had last week announced it would cut its international capacity by nearly 25% over the next six months.

UBS analysts said the latest travel restrictions would have a significant effect on Qantas' international traffic, which historically accounted for around 45% of revenue and 25% of earnings before interest and tax.

"A downside scenario where international traffic is down 50% for a whole year and domestic down 30% could result in cash burn of up to A$200 million ($123.60 million) per month after incorporating changes to the business," UBS said of Qantas.

Smaller rival Virgin Australia Holdings Ltd, which has a weaker balance sheet but a heavier domestic focus, said it was assessing its response to the new travel restrictions.

Virgin said on Friday it would make deeper capacity cuts, suspend financial guidance, freeze hiring and offer leave without pay to staff.

© (c) Copyright Thomson Reuters 2020.

©2020 GPlusMedia Inc.

4 Comments
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Really, we'll be lucky to have any functioning airlines left after all this is over. We'll all have to sail everywhere.

I guess that would make Greta Thunberg happy, at least.

2 ( +5 / -3 )

I feel super fortunate to have moved all my asset into annuities against everyone's recommendations.

I am hoping all my family members working in the travel and airline business are going to keep their jobs.

@BigYen: Greta has been quiet. I hope she is ok.

-1 ( +1 / -2 )

all travellers would have to self-isolate for 14 days.

How many of them will go hoard shopping first?

0 ( +0 / -0 )

Aircraft spend most of the time airborne. Has anyone figured out if there is enough space on the ground to park them all up?

2 ( +2 / -0 )

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