Global fear of flying spawns crisis for airlines
The coronavirus has suddenly and unexpectedly created the biggest challenge for the global airline industry since 9/11. Bookings around the world are falling sharply. US carriers are following Asian and European airlines in cutting flights, grounding planes and enacting draconian cost reductions, such as hiring freezes and unpaid leave. Foreign airlines are looking for help from governments, banks and investors. Major airlines are trying to reassure passengers with promises of scrubbed cabins, filtered air and free-flowing hand sanitizer. “Delta has been preparing for such a scenario,” Delta CE Ed Bastian wrote in an email to customers Sunday that outlined the airline’s response, insisting that travel “can’t—and shouldn’t— simply stop.” The IATA estimates the virus could reduce passenger revenue world-wide this year by between $63b and $113b, or as much as 20%. As recently as last month, the trade group was forecasting a hit of less than $30b. The coronavirus has grounded 2,000 aircraft around the world, analysts at Jefferies estimate. By comparison, the Sept. 11, 2001, terrorist attacks cut airline revenues by 7%, or $23b, according to IATA. “This coronavirus is driving us all a bit crazy,” said JetBlue CE Robin Hayes. US airline stocks have fallen 35%, on average, over the past two weeks as bookings fall, including a 7.5% decline on Monday. Bookings for April travel made over the past week are estimated by analysts to have fallen 25% from last year’s levels. Bond prices for US airlines fell sharply on Monday, a sign of investor unease about their ability to pay back debt.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-03-10/general/global-fear-of-flying-spawns-crisis-for-airlines
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Global fear of flying spawns crisis for airlines
The coronavirus has suddenly and unexpectedly created the biggest challenge for the global airline industry since 9/11. Bookings around the world are falling sharply. US carriers are following Asian and European airlines in cutting flights, grounding planes and enacting draconian cost reductions, such as hiring freezes and unpaid leave. Foreign airlines are looking for help from governments, banks and investors. Major airlines are trying to reassure passengers with promises of scrubbed cabins, filtered air and free-flowing hand sanitizer. “Delta has been preparing for such a scenario,” Delta CE Ed Bastian wrote in an email to customers Sunday that outlined the airline’s response, insisting that travel “can’t—and shouldn’t— simply stop.” The IATA estimates the virus could reduce passenger revenue world-wide this year by between $63b and $113b, or as much as 20%. As recently as last month, the trade group was forecasting a hit of less than $30b. The coronavirus has grounded 2,000 aircraft around the world, analysts at Jefferies estimate. By comparison, the Sept. 11, 2001, terrorist attacks cut airline revenues by 7%, or $23b, according to IATA. “This coronavirus is driving us all a bit crazy,” said JetBlue CE Robin Hayes. US airline stocks have fallen 35%, on average, over the past two weeks as bookings fall, including a 7.5% decline on Monday. Bookings for April travel made over the past week are estimated by analysts to have fallen 25% from last year’s levels. Bond prices for US airlines fell sharply on Monday, a sign of investor unease about their ability to pay back debt.<br/>
