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Lufthansa’s unit Austrian Airlines halts all flights as global airlines suffer shrinking demand

Three major global airline alliances call on governments to alleviate the challenges faced by the industry amid the Covid-19 pandemic

Planes of Lufthansa's unit Austrian Airlines parked at Vienna International Airport. The airline has suspended operations until March 28. Reuters  
Planes of Lufthansa's unit Austrian Airlines parked at Vienna International Airport. The airline has suspended operations until March 28. Reuters  

Lufthansa-owned Austrian Airlines said it will halt all regular flights starting from March 18 in response to travel restrictions worldwide as global carriers suffer from deteriorating air travel demand amid the novel coronavirus pandemic.

Austrian Airlines plans to suspend flight operations until March 28 in in response to “entry bans being imposed across the globe and a rapid decline in demand for air travel”, the airline said in a statement on its website on Monday. European airlines including Norwegian Air, Ryanair, EasyJet and Lufthansa group also announced significant cuts to their flight schedules.

“European airlines are in for a rough year as coronavirus dents demand more than in the US, and with large fuel hedges, the carriers don't have much leeway to lower fares and stimulate demand once the virus wanes,” George Ferguson, senior aerospace industry analyst at Bloomberg Intelligence said in a research note. “Pilot contracts provide little flexibility to lower wage costs near term, exacerbating effects.”

Global airlines announced further capacity cuts on Monday as the rapid spread of the deadly Covid-19 prompts more people to stay home, dents economic growth and triggers some governments to close borders to help contain the virus.

Norwegian Air on Monday said it will scrap 85 per cent of its flights and temporarily lay off more than 7,300 employees or 90 per cent of its workforce due to “stagnating demand and enforced travel restrictions by authorities worldwide”, it said in a statement on its website.

“What our industry is now facing is unprecedented and critical as we are approaching a scenario where most of our airplanes will be temporarily grounded,” it warned.

The world’s three biggest airlines alliances —Oneworld, SkyTeam and Star Alliance — on Monday called on governments "to take action to alleviate the unprecedented challenges faced by the global airline industry amid the Covid-19 pandemic”, according to a joint statement.

The trio represent almost 60 airlines around the world that contribute more than half of global airline capacity.

They called on regulators to consider extending suspensions of airport slot rules for the entire operating season, reduce airport fees and overflight charges to “mitigate the financial pressure faced by airlines due to a severe decline in passenger demand”.

Regionally, Bahrain’s Gulf Air said it will halt flights to and from several destinations across its network effective from March 18 until March 31. All flights will be suspended except services to and from Abu Dhabi, Dubai, Muscat, London, Paris, Frankfurt, Istanbul, Cairo, Mumbai, Delhi, Cochin, Karachi and Manila.

Egypt will suspend all flights at its airports starting from March 19 until the end of the month to curb the spread of the virus in the Arab world’s most populated nation, Reuters reported, citing a press conference with Prime Minister Mostafa Madbouly.

Sydney-based Centre for Aviation (CAPA), an airline industry analysis firm, warned on Monday that without assistance many airlines could face bankruptcy by the end of May as forward bookings are “far outweighed” by cancellations amid government recommendations that discourage flying.

“Coordinated government and industry action is needed – now – if catastrophe is to be avoided,” it said.

Updated: March 16, 2020 09:45 PM

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