Abu Dhabi, UAESunday 27 September 2020

CORONAVIRUS

Airline Swiss to ground half of its fleet

French finance ministry official also denies bailout of Air France-KLM is on the cards

Lufthansa-owned Swiss is halting all project spending and freezing recruitment as part of a series of money-saving measures as more countries place restrictions on flights due to the coronavirus outbreak. Reuters.  
Lufthansa-owned Swiss is halting all project spending and freezing recruitment as part of a series of money-saving measures as more countries place restrictions on flights due to the coronavirus outbreak. Reuters.  

Lufthansa subsidiary Swiss International is taking half its fleet out of service and reducing working hours for flight personnel to help safeguard its finances during the coronavirus outbreak, it said.

"To compensate for the sharp fall in demand and resultant lost revenue, Swiss has decided to take immediate further precautionary action to secure liquidity," it said in a statement on Friday.

Payout of variable salary components would be postponed to the end of this year for both flying personnel and senior management, the airline said, adding all recruitment besides apprentices and interns would also be halted and all non-essential projects halted or postponed.

Major US and European airlines have begun discussions with governments on obtaining financial assistance to weather a crippling travel slump brought on by the coronavirus, which has hobbled global travel and is threatening thousands of industry jobs.

Swiss International's parent group Lufthansa on Friday said it would scrap its annual dividend, slash its flight schedule further and was also considering a request for state aid to help it deal with the impact of the virus outbreak.

Swiss said it was in contact with authorities and would initially apply for short-time working hours for cockpit and cabin staff, and was also considering such measures for workers on the ground.

Meanwhile, a French finance ministry official on Saturday denied that a bailout of Air France-KLKM was being considered.

The official was responding to a report in Les Echos newspaper saying the French government was considering injecting capital into the airline as it grapples with the consequences of the coronavirus.

The three largest airlines in the US — Delta Air Lines, American Air Lines and United Airlines — are in talks with the government about potential assistance amid a dramatic drop-off in air travel demand and the newly-imposed ban on flights to the US from 26 European countries.

"We will be helping the airline industry if we have to," US President Donald Trump said on Friday. "So far people haven't been asking but if they should be asking we want to make sure our airlines are very strong."

Delta chief executive Ed Bastian also told employees on Friday that it was pursuing government aid.

"We are in discussions with the White House and Congress regarding the support they can provide to help us through this period," Mr Bastian said in a memo released by the airline, adding he was forgoing his salary this year. "The speed of the demand fall-off is unlike anything we've seen."

Delta, United and American have all raised capital in recent weeks, with United tapping $2 billion (Dh7.3bn). Their share prices have fallen by between 40 per cent to 56 per cent over the past month.

Updated: March 14, 2020 08:24 PM

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