The spread of COVID-19 could force weak airlines to merge with competitors, the head of Air France-KLM and the A4E association of European airlines said on Tuesday.
“There are quite a few weak carriers around the world,” Benjamin Smith said at the association’s annual meeting. “I believe this will accelerate consolidation.”
Dozens of airlines scaled back or halted flights to China in January as the coronavirus outbreak gained steam in the country, with people reluctant to travel and governments erecting travel restrictions.
Photo: Reuters
Last week, airlines moved to reduce flights to Italy where the largest outbreak in Europe is under way.
“It’s clear we have yet to see the full effect of the COVID-19 on the air transport sector,” Smith said.
Following many others, on Tuesday Scandinavian airline SAS AB announced it was suspending all flights to and from Italian cities Milan, Bologna, Turin and Venice, from yesterday to March 16.
The move followed updated travel recommendations from the Danish Ministry of Foreign Affairs, advising against non-necessary travel to the region.
The Swedish-Danish carrier announced earlier in the day that it was pursuing a number of cost-cutting measures to mitigate the impact of reduced demand.
It also said that, in addition to already suspended flights to mainland China, it would now suspend flights to Hong Kong.
Last month the International Air Transport Association (IATA) said that airlines operating in the Asia-Pacific region stand to lose a combined US$27.8 billion of revenue this year due to the epidemic.
Governments have come under mounting pressure to help support businesses, as the outbreak disrupts the economy.
“Any taxes which could be limited or temporarily lifted would be appreciated by the industry,” Smith said.
The A4E association is composed of 16 European airlines, including Air France-KLM, EasyJet PLC, International Airlines Group SA (which owns British Airways PLC, Aer Lingus Group PLC, Iberia and Vueling Airlines SA), Deutsche Lufthansa AG and Ryanair Holdings PLC.
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