Breaking News

'Apocalypse now': Airlines turn to cargo for revenue as U.S. Senate approves aid package

The passenger travel industry has been ravaged by the coronavirus pandemic, with Australia’s Flight Centre Travel Group Ltd announcing plans to cut 6,000 travel agent roles globally, either temporarily or permanently.

The International Air Transport Association (IATA), which represents airlines, said it has written to the heads of governments of 18 countries in the Asia-Pacific region, including India, Japan, Malaysia, South Korea, Thailand, Vietnam and the Philippines for emergency support for carriers.

“Travel restrictions and evaporating demand mean that, aside Business News from cargo, there is almost no passenger business,” IATA Director General Alexandre de Juniac said in a statement. “For airlines, it’s apocalypse now.”

Singapore Airlines Ltd on Thursday went into a rare trading halt pending an announcement, days after it said it would ground almost its entire fleet and seek more financing as it grapples with the coronavirus pandemic.

IATA estimates the COVID-19 crisis will reduce passenger demand in Asia-Pacific by 37% this year compared to 2019, with a revenue loss of $88 billion.

Singapore, Australia and New Zealand are among the few countries in the region that have announced some financial relief for airlines, but it has not stopped carriers from putting staff on leave and grounding planes.

Virgin Australia plans to permanently cut more than 1,000 jobs among the 8,000 staff that have been stood down due to cuts to its flying schedule, chief executive Paul Scurrah said.

In a move unthinkable under normal conditions, Australia’s competition regulator said it would allow Virgin, Qantas Airways Ltd and Regional Express Ltd to coordinate flight schedules and share revenue on 10 regional routes. The approval is conditional on the carriers charging fares no higher than those in place on Feb. 1.

“We hope that this temporary measure will also support airlines’ ability to again compete with each other on these routes once the pandemic crisis has passed,” Australian Competition and Consumer Commission Chairman Rod Sims said.

In the United States, United Airlines Holdings Inc unveiled more domestic capacity cuts, meaning its total, including international, will drop by around 68% in April.

Alaska Air Group Inc said it would cut its schedule by 70% in  Press Release Distribution Services For Business April and May and had suspended its dividend, drawn down a $400 million credit line and secured an additional $425 million loan to help weather the crisis.

The U.S. Senate on Wednesday evening passed an industry aid package, half in the form of grants to cover some 750,000 employees’ paychecks.

Companies receiving funds cannot lay off employees before Sept. 30 or change collective bargaining agreements.

The bill has restrictions on stock buybacks, dividends and executive pay, and allows the government to take equity, warrants or other compensation as part of the rescue package.

The U.S. House of Representatives is expected to vote to approve the measure on Friday and President Donald Trump has promised to sign it into law.
For More Information 

No comments