March 17, 2020 / 1:18 PM / 24 days ago

Airlines count mounting costs of the coronavirus shock

(Reuters) - Airlines across the globe are feeling the pain as travel demand withers because of the coronavirus outbreak. Several have scrapped flights and ditched financial forecasts.

Below is a list of how the world’s biggest airlines have responded:

AIR FRANCE KLM

Air France KLM will park its biggest airliners and slash services by up to 90% over the next few days, it said on March 16. The group said it had identified measures to save 200 million euros ($223 million) in 2020 and ways to cut its capital expenditure by 350 million euros.

AIR NEW ZEALAND

Air New Zealand said on March 16 it would cut long-haul capacity by 85% in the coming months and look to lay off some permanent employees. The domestic network would be reduced by 30% in April and May, while the directors will take a 15% pay cut until the end of this year.

The airline has withdrawn its full-year earnings outlook, frozen hiring and offered unpaid leave to staff.

AMERICAN AIRLINES INC

American Airlines plans to cut 75% of its international flights through May 6 and ground nearly all its widebody fleet.

DELTA AIR LINES

Delta said it has seen net bookings fall by 25% to 30% and expected the situation to worsen further.

The airline is cutting domestic capacity by 10% to 15% and international by 20% to 25%, freezing hiring, offering voluntary leave options to staff and looking at early retirement of older aircraft.

FINNAIR

Finnair on March 16 issued its second profit warning in three weeks, saying it would report a substantial comparable operating loss for 2020 as it was cutting around 90% of its normal capacity from the beginning of April.

On March 17, Finnair said it would cancel most of its flights until the end of June as it starts transitioning to a limited network.

IAG

International Consolidated Airlines Group (IAG), the owner of British Airways and Iberia, said it would cut its flying capacity by at least 75% in April and May.

The group detailed cost cuts including a freeze on discretionary spending, working hours reductions and a temporary suspension of employment contracts.

On March 17 the UK pilot union BALPA said that British Airways was due to make an unspecified number of pilots redundant.

IAG said 2021 capacity was likely to be lower than planned, and that the crisis would accelerate the permanent retirement of dozens of aircraft. It could not provide profit guidance for the current financial year.

JETBLUE AIRWAYS CORP

JetBlue, which pulled its first-quarter and 2020 earnings forecast, said it was adjusting schedules between March and early May and was considering more flight cancellations.

JetBlue said the outbreak was expected to make at least a six percentage-point dent in its total revenue per available seat mile in the first quarter.

The carrier was considering voluntary time-off programs for employees, delaying some hiring and increasing the frequency with which it cleans aircraft.

DEUTSCHE LUFTHANSA AG

The German carrier cut long-haul capacity by up to 90% from March 17, and said it would only operate 20% of planned intra-Europe flights. It had previously said it would slash up to half the flights across its stable of airlines from April.

NORWEGIAN AIR

Norwegian Air said on March 16 it would cancel 85% of its flights and temporarily lay off 7,300 employees. The cancellations add to an already difficult financial situation at Norwegian, which has scrapped its 2020 outlook and lost 70% of its market value this year.

QANTAS AIRWAYS

Qantas Airways said on March 16 it would be making fresh cuts to its flying schedule beyond the 25% reduction in international capacity it announced previously.

CEO Alan Joyce will take no salary for the rest of the current financial year, the management team will receive no bonuses and all staff are being encouraged to take paid or unpaid leave, it said.

The airline said it could no longer provide guidance on the outbreak’s financial impact.

RYANAIR

The Irish airline said on March 16 it would ground most of its aircraft in Europe over the next seven to ten days, expected to cut seat capacity by 80% for the next two months, and could even ground its entire fleet.

RUSSIA

Russia’s airlines could lose 100 billion roubles ($1.4 billion) due to the outbreak and risk going bankrupt, the head of Russia’s Federal Air Transport Agency told the Interfax news agency.

SCANDINAVIAN AIRLINES

SAS said on March 15 it would temporarily halt most of its traffic starting from March 16 “until there are yet again conditions to conduct commercial aviation”.

The airline said this would trigger temporary lay-offs of up to 10,000 employees, or 90% of the airline’s total workforce.

SINGAPORE AIRLINES

Singapore Airlines said on March 17 it was set to operate only 50% of the capacity planned up to end of April.

SOUTHWEST AIRLINES CO

Chief Executive Officer Gary Kelly is taking a 10% pay cut and was quoted in a media report as saying the carrier may ground airplanes and furlough employees, if conditions continue to worsen.

Southwest will take other steps to reduce costs, such as freezing hiring for non-frontline workers, according to the report. (on.wsj.com/2wLtuvs)

SPIRIT AIRLINES

The U.S. airline said it was cutting fares by up to 70% and trimming April capacity by about 5%.

UNITED AIRLINES HOLDINGS INC

The Chicago-based airline said on March 15 it would cut corporate officers’ salaries by 50% and reduce flight capacity by about 50% in April and May, with deep capacity cuts also expected into the summer travel period.

VIRGIN ATLANTIC

Virgin Atlantic, the UK-based airline, said it would ground 75% of its fleet by 26 March and by up to 85% at points in April, as it cancelled more flights due to the outbreak.

WESTJET AIRLINES

Canadian WestJet suspended all international and transborder flights for 30 days from March 22 and reduced its domestic schedule by 50%. (bit.ly/2Udcne7)

Compiled by Ankit Ajmera and Rachit Vats in Bengaluru, Milla Nissi and Tommy Lund in Gdansk; Editing by Tomasz Janowski and Mark Potter

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