The crisis engulfing the airline industry deepened on Tuesday as carriers cancelled flights, withdrew earnings guidance and implemented austerity measures to cope with the travel slump caused by the coronavirus outbreak, the Financial Times reports.
Alan Joyce, chief executive of Qantas, said: “I think this will be a survival of the fittest,” as the Australian carrier outlined drastic cost-cutting measures that included cutting almost a quarter of international flights, asking staff to take unpaid leave and sacrificing his own salary for the next three months. “We know we can ride this out,” said Mr Joyce. “Not all airlines around the world will.”
The Financial Times reports that the EU also said on Tuesday it would relax airport slot rules to aid the ailing airline industry. Under normal circumstances, carriers lose airport landing and take-off slots if they do not use them for 80 per cent of the time — a requirement that is becoming more difficult to meet in light of widespread flight cancellations because of coronavirus.
Cracks have already begun showing in those nations worst affected by travel restrictions. Korean Air has warned it may not survive if the coronavirus outbreak is not brought under control quickly. Norwegian Air Shuttle, one of the most financially stretched carriers, said it would slash 3,000 flights over the next three months, equating to about 15 per cent of its total capacity. China’s main carriers — Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines — have slashed routes and put pilots on unpaid leave. American Airlines said its overseas capacity would be reduced by 10 per cent over the peak summer travel period, including a 55 per cent reduction in trans-Pacific capacity.