Delta Air Lines is grounding 300 aircraft, representing about 30% of its 900-strong fleet, and cutting all flights to mainland Europe as the coronavirus cripples travel and grips the world. The airline says it will cut overall capacity 40% in the coming months, including all flights to mainland Europe. It is the largest reduction in Delta’s history, including in the months following the 9/11 terrorist attacks. “The speed of the demand fall-off is unlike anything we have ever seen,” writes CE Ed Bastian in a March 13 note to employees. “We are moving quickly to preserve cash and protect our company.” Bastian says the airline is deferring aircraft deliveries and cutting discretionary spending on information technology projects, consultants and contractors, as well as offering voluntary unpaid leave to employees. <br/>
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The French govt is preparing to come to the aid of Air-France KLM, which has been hit hard by the coronavirus and Donald Trump’s travel ban. France is studying how best to support the carrier, which is 14.3% state-owned, with senior finance ministry officials saying they were considering loans rather than increasing their shareholding. The govt has already said it would stand behind the airline. After Air France-KLM CE Ben Smith and the French finance minister spoke Friday, rumours swirled in the French press that the state was considering a capital injection. And while those rumours were swiftly denied by the finance ministry Saturday, officials said such an injection remained an option if the situation deteriorated further. <br/>
Korean Air is in danger of collapse if it does not urgently address its high debt levels, one of its biggest shareholders has warned, just as the coronavirus pandemic sparks a global industry crisis. South Korea’s travel sector was one of the earliest to be hit by the coronavirus after a big outbreak in February prompted more than 100 countries to introduce travel bans or tougher entry restrictions on people travelling from Korea. That led to Korean Air slashing more than 80% of its international capacity. The company has about US$4.3b in debt maturing this year, according to Moody’s, and some investors are concerned about its ability to pay. “Given its poor financial status . . . Korean Air will be the first one to fall off the cliff” and the business not survive said the president of Korea Corporate Governance Improvement Fund. <br/>
Alitalia is to enforce the wearing of protective masks on board flights if load factors mean passengers cannot be adequately spaced. The carrier has imposed the measure with immediate effect, part of the effort to combat the coronavirus outbreak which has affected Italy particularly badly. Alitalia is having to cope with severe restrictions to its operations as the govt attempts to bring the situation under control. Passengers will be asked to provide themselves with a protective mask before boarding, and such masks “must be worn” if a large number of passengers means a 1m interpersonal spacing cannot be maintained. Alitalia warns that it could deny boarding to passengers who do not have a mask in their possession. <br/>