Airbus shares have slumped and Boeing has called for emergency aid as disruption caused by the COVID-19 outbreak shifts from the airline sector to manufacturing. The downturn, the sharpest since 9/11, is caused by cancellations of flights and border closures as countries impose tighter restrictions to flatten the infection curve of the global pandemic.
The European Commission is to ban all non-essential travel throughout the Schengen free-travel zone for 30 days and France has imposed even tougher restrictions on movement of its people.
As the crisis deepens, the impact of tighter restrictions and cancellations is being felt by manufacturers and the wider supply chain, as well as airlines and tour operators. Among today’s updates:
Airbus halts production in France and Spain
Airbus has announced plans to suspend production at its plants in France and Spain for four days. The shutdown represents the most serious disruption to production since a strike at the then BAe Systems in 1989 and has been put in place to allow the manufacturer to put in place contingency plans after drastic measures were put in place to put France into lockdown by President Emmanuel Macron to slow the spread of the virus
The announcement pushed shares in the manufacturer down 7 per cent.
Boeing requests government aid
Boeing has appealed to US government officials for short-term aid.
The appeal has been made on behalf of the company, which has already been impacted by the grounding of the 737 Max, but also on behalf of its suppliers and airlines.
Boeing has asked White House and congressional officials for the aid package as the global pandemic afflicts unprecedented damage on the travel industry.
A statement by the manufacturer read: “Short-term access to public and private liquidity will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery. We appreciate how the administration and Congress are engaging with all elements of the aviation industry during this difficult time.”
UK airports warn of closures in appeal for government aid
UK airports have written a joint letter to the prime minister requesting emergency financial support, warning that some terminals will have to shut within weeks without urgent intervention.
The letter has been signed by the heads of Gatwick, Heathrow, and the Manchester Airports Group. Some regional airports, such as Southampton, and some airports in Scotland are already in a precarious position following the recent collapse of Flybe.
Airports are asking for greater flexibility over protocol for border staff, and the suspension or deferment of Air Passenger Duty (APD).
The Airport Operators Association has asked for emergency support and a suspension on airport taxes so airport staff can remain employed throughout the crisis and relief on policing costs.
British Airways to make a number of pilot redundancies
British Airways is to make an unspecified number of pilots redundant according to UK pilot union BALPA.
The move comes as the airline seeks to reduce its costs in a bid to survive the COVID-19 crisis. BA is part of the IAG group which say the restrictions will lead to a 75 per cent decrease within the group. Last week CEO Alex Cruz said BA was in a “battle for survival” and would be forced to make job cuts.
BA says it is working to avoid compulsory dismissals among its 3,900 pilots.
BALPA General Secretary Brian Strutton said: “While we do not underestimate the magnitude of the problem facing BA and other airlines we are extremely disappointed that a company like BA with a strong balance sheet and cash reserves has rushed into redundancy consultation.”
Alitalia to be nationalised
Italian carrier Alitalia will be nationalised with privatisation hopes dashed by the crisis.
With a global ban on flights to Italy and the country in strict lockdown, the rescue package to secure the future of the national carrier is set to cost the Italian taxpayers an estimated £550m in a country on the brink of recession.
The carrier was already in financial difficulty before the COVID-19 crisis and outpriced by low-cost carriers. Its market share, even within Italy, had slipped to just 14 per cent. Recent attempts to sell the carrier to Lufthansa, Delta and even the Italian state railway company had all collapsed.
Ukraine suspends inter-city air and transport services
Ukraine, which has one of the lowest figures of coronavirus of any European country at just seven confirmed cases, has announced a ban on inter-city rail, air and bus services around the country.
The new restrictions will be in place from 18 March until 3 April.
German airports welcome government aid pledge
German airport association ADV has welcomed a pledge by the country’s Federal Government to support the air traffic industry.
The Airport Association ADV acknowledged that global measures such as closing borders and restricting travel were “correct and understandable” for the prevention of the spread of coronavirus but added that the crisis was having “devastating economic effects” for the wider aviation industry.
The Association said the situation was forcing airports to employ “austerity measures” at a cost that could no longer be absorbed. Now the Federal Government has promised support for the air traffic industry.
EBAA and NBAA cancel events
The European Business Aviation Association (EBAA) and National Business Aviation Association (NBAA) have cancelled the 2020 European Business Aviation Convention & Exhibition (EBACE2020).
The event was scheduled to take place in Geneva from May 26-28, 2020. The decision was made after the Swiss authorities banned events of more than 100 people until April 30 and reintroduced Schengen border checks.
Exhibitor and registration fees will be refunded in full.
Aero 2020 reschedules for 2021
The Aero 2020 show has been cancelled and rescheduled to April 14 to 17, 2021. Postponement of the event to a later date in 2020 was not possible due to the event venue, Messe Friedrichshafen’s calendar. Aero said it would cancel and refund advance payments for participants and exhibitors.
RAeS cancels Urban Air Mobility Conference 2020
The Royal Aeronautical Society (RAeS) has cancelled its Urban Air Mobility Conference 2020, which was scheduled for 24-25 March 2020. The event will be rescheduled to 30 September – 1 October 2020.
