Major world airlines on Monday announced further deep cuts to service as the worsening COVID-19 crisis ravages demand, accentuating talk of government support with US carriers formally releasing a plea for a bailout of about US$50 billion.
Citing an “unprecedented” drop in demand that is “getting worse by the day” and “much worse than 9/11,” the trade group Airlines for America (A4A) unveiled a wish list including grants, loans and tax relief.
“This is a today problem, not a tomorrow problem. It requires urgent action,” A4A president and chief executive officer Nicholas Calio said.
The group said that the industry was on track to suffer a drop of US$23 billion in liquidity at the end of this year under an “optimistic” scenario and a drop of US$53 billion under a “pessimistic” scenario.
“As of the morning of March 16, the pessimistic scenario is looking most likely,” the group said.
White House officials have highlighted airlines as a major concern and signaled broad support for a federal plan to fortify the industry.
“We have to back the airlines,” US President Donald Trump told a briefing. “It’s not their fault. In fact, they were having a record season.”
Earlier, European carriers announced additional cutbacks in service due to the crisis.
International Airlines Group (IAG), owner of British Airways PLC and Spanish carrier Iberia SA, announced that it would slash flight capacity by 75 percent during next month and May owing to the COVID-19 outbreak, while Germany’s Deutsche Lufthansa AG said it would trim seating capacity on long-haul flights by up to 90 percent, affecting mainly routes to Africa, the Middle East and South America.
Britain’s Virgin Atlantic Airways Ltd added that it has decided to park 75 percent of its total fleet, and in April this would rise to as high as 85 percent.
Virgin has reportedly called upon the UK government to inject emergency support totaling ￡7.5 billion (US$9.2 billion) to help keep Britain’s aviation industry flying.
“Last week saw a rapid acceleration of the impact of COVID-19 on global aviation and tourism,” Virgin Atlantic said in a statement. “The situation is deteriorating at pace and the airline has seen several days of negative bookings, driven by a huge volume of cancellations as customers choose to stay at home.”
British no-frills carrier EasyJet PLC said that it might have to ground “the majority” of its fleet, urging governments across Europe to help their airlines maintain access to liquidity.
EasyJet chief executive officer Johan Lundgren said that “European aviation faces a precarious future,” and called for government backing if the industry is to survive.
Irish budget carrier Ryanair Holdings PLC did not rule out a full grounding as it unveiled stinging flight cutbacks.
IAG said that it was taking measures including cuts to nonessential spending, a freeze on recruitment and reducing work hours.
A management shake-up had also been put on hold, and Willie Walsh, who was due to step down on March 26, would remain as IAG’s chief executive officer, the company said.
Air France would slash flight capacity by 70 to 90 percent over the next two months, while Austrian Airlines AG would suspend all flights from tomorrow, and Finnair Oyj is cutting 90 percent of capacity until the situation improves.
The German government on Monday said that it was planning to shield companies from going under because of the pandemic, by suspending legal obligations for firms facing acute liquidity problems to file for bankruptcy.
German tourism and hotel group TUI AG said that it was applying for state aid to keep it afloat, as it suspended the “majority” of its operations.
In London, a spokesman for British Prime Minister Boris Johnson signaled that the government would examine help for affected businesses, not just airlines, via tax authority Her Majesty’s Revenue and Customs (HMRC).
“HMRC is ready to help all businesses including airlines experiencing temporary financial difficulties due to coronavirus,” Johnson’s spokesman said.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
RSS