Major world airlines on Monday axed almost all flights on a temporary basis as the worsening coronavirus crisis sparks travel bans, ravages demand and sends shares into freefall, triggering pleas to help carriers survive.
IAG, owner of British Airways and Spanish carrier Iberia, announced it would slash flight capacity by 75 percent during April and May owing to the COVID-19 outbreak.
The London-based carrier’s share price crashed nearly 27 percent in mid-afternoon deals.
Other airlines tumbled, with Germany’s Lufthansa erasing almost 11 percent in value and Air France wiping out 17 percent on similar announcements.
Britain’s Virgin Atlantic added that it has decided to park 75 percent of its total fleet — and in April this will rise as high as 85 percent.
Virgin has reportedly called upon the UK government to inject emergency support totalling 7.5 billion pounds ($9.2 billion, 8.3 billion euros) to help keep Britain’s aviation industry flying.
In Germany, Lufthansa has been forced to scrap around two thirds of its flights in coming weeks as several countries including the United States ban travellers from Europe.
“Last week saw a rapid acceleration of the impact of COVID-19 on global aviation and tourism,” Virgin Atlantic warned 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 warned it may have to ground “the majority” of its fleet, urging governments across Europe to help their airlines maintain access to liquidity.
EasyJet CEO Johan Lundgren added: “European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over.”
Irish budget carrier Ryanair meanwhile did not rule out a full grounding as it unveiled stinging flight cutbacks.
As part of its drastic action, IAG said it was “cutting non-essential and non-cyber related IT spend, freezing recruitment and discretionary spending, implementing voluntary leave options, temporarily suspending employment contracts and reducing working hours”.
IAG added that a management shake-up had been put on hold, noting that Willie Walsh would remain as chief executive.
Walsh had been due to step down on March 26, to be replaced by Iberia CEO Luis Gallego.
Air France will meanwhile slash flight capacity by 70-90 percent over the next two months, while Austrian Airlines will suspend all flights from Thursday, and Finnair is cutting 90 percent of capacity until the situation improves.
The German government on Monday said it is 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 said it was applying for state aid to keep it afloat, as it suspended the “majority” of its operations.
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