Factbox: Airlines count mounting costs of the coronavirus shock
(Reuters) – Airlines across the globe are feeling the pain as travel demand withers because of the coronavirus outbreak. Several have grounded many flights and ditched their financial outlooks.
Below is a list of how the world’s biggest airlines have responded to the sharp drop in travel demand since the outbreak forced a multitude of cancellations.
AIR FRANCE KLM (AIRF.PA)
Air France expects to cancel 3,600 flights in March, including cutting 25% of its European capacity and a 13% reduction in long-haul flights. Its Dutch arm KLM expects to reduce long-haul capacity by a similar amount.
The group carried just under 7 million passengers in February, down 0.5% from a year earlier, but warned the impact of the outbreak would show up more in the coming months.
AIR NEW ZEALAND (AIR.NZ)
Air New Zealand has withdrawn its full-year earnings outlook, frozen hiring, offered unpaid leave to staff and said it would cut more capacity.
The airline said its network capacity would fall by 10% between February and June, including a 26% cut to Asia, 7% to Australia and 4% in the domestic market.
ALASKA AIR GROUP (ALK.N)
The U.S. carrier has seen 270,000 cancellations for February.
For March, departures bookings fell by 265,000 since Feb. 24 and it is aggressively monitoring loss-making flights while considering cutting capacity by 3%.
AMERICAN AIRLINES INC (AAL.O)
American Airlines is cutting domestic capacity by 7.5% in April and international by 10% for the summer season.
Chief Executive Officer Doug Parker said his airline had $7.3 billion in available capital and was eyeing cost savings such as reduced pilot training classes.
BRITISH AIRWAYS (ICAG.L)
IAG-owned British Airways canceled all fights to and from Italy on Tuesday after the country was put on lockdown until next month.
Parent company International Consolidated Airlines Group, which also includes Iberia, said last month that the virus would hit earnings this year, but it could not tell by how much.
DELTA AIR LINES DAL.O
Delta said it has seen net bookings fall by 25% to 30% and expected the situation to worsen further.
The airline is cutting domestic capacity by 10% to 15% and international by 20% to 25%, freezing hiring, offering voluntary leave options to staff and looking at early retirement of older aircraft.
JETBLUE AIRWAYS CORP (JBLU.O)
JetBlue, which pulled its first-quarter and 2020 earnings forecast, said it was adjusting schedules between March and early May and was considering more flight cancellations.
JetBlue said the outbreak is expected to make at least a six percentage-point dent in its total revenue per available seat mile in the first quarter.
The carrier was considering voluntary time-off programs for employees, delaying some hiring and increasing the frequency with which it cleans aircraft.
DEUTSCHE LUFTHANSA AG (LHAG.DE)
The German carrier is cancelling up to 25% of flights across the group up to the end of March and will slash up to half the flights across its stable of airlines from April.
The company, which includes Swiss International Air Lines and Austrian Airlines, also said it was considering temporarily grounding its entire fleet of 14 Airbus SE (AIR.PA) A380 superjumbos in Frankfurt and Munich, out of total fleet of 763.
Lufthansa said other measures included offering staff unpaid leave, reduced hours or bringing forward annual leave.
NORWEGIAN AIR (NWC.OL)
Norwegian Air will lay off staff and cut around 3,000 flights between mid-March and mid-June corresponding to around 15% of its capacity. The cancellations add to an already difficult financial situation at Norwegian, which last week scrapped its 2020 outlook and has lost 70% of its market value this year.
QANTAS AIRWAYS [QAN.AX]
Qantas Airways will cut its international capacity by nearly 25% over the next six months and delay an order for Airbus A350 planes.
Qantas’ chief executive Alan Joyce will take no salary for the rest of the current financial year, the management team will receive no bonuses and all staff are being encouraged to take paid or unpaid leave.
The airline said it could no longer provide guidance on the outbreak’s financial impact, which at the time of its half-year results on Feb. 20 it had estimated at A$100 million to A$150 million hit to underlying core earnings this financial year.
SOUTHWEST AIRLINES CO (LUV.N)
Chief Executive Officer Gary Kelly is taking a 10% pay cut and was quoted in a media report as saying the carrier may ground airplanes and furlough employees, if conditions continue to worsen.
Southwest will take other steps to reduce costs, such as freezing hiring for non-frontline workers, according to the report. (on.wsj.com/2wLtuvs)
SPIRIT AIRLINES (SAVE.N)
The U.S. airline said it was cutting fares by up to 70% and trimming April capacity by about 5%.
TURKISH AIRLINES (THYAO.IS)
Turkish Airlines sees 5% decline in bookings for the coming months, with flights to Asia most affected. It said that 2020 targets will have to be revised and that several scenarios, including decreasing the frequency and capacity of flights, were being evaluated.
UNITED AIRLINES HOLDINGS INC (UAL.O)
The Chicago-based airline will not take jet deliveries or add capacity until it sees demand returning, which it said could take 18 months.
The airline expects to report a first-quarter loss and revenue to fall as much as 70% in April and May and 20% in November and December.
It said on March 10 it had raised $2 billion in new capital to bring liquidity to $8 billion and slashed its 2020 capital expenditure by more than a third to about $4.5 billion.
Source: Read Full Article