Airlines cut staff, capacity as industry battered by virus

Governments around the world are offering financial aid to airlines as reduced demand, stricter travel controls to battle the coronavirus pandemic force carriers to deepen cuts.

ABU DHABI - Middle Eastern airline Qatar Airways laid off about 200 Filipino staff in Doha this week and rival Emirates asked pilots to take unpaid leave as the coronavirus outbreak hammers demand for travel.

Those moves came as governments around the world offered financial aid to airlines as stricter travel controls to battle the coronavirus pandemic forced carriers to deepen cuts to capacity and staffing.

Qatar and the UAE's state-owned airlines have likewise had to slash dozens of flights, which are crucial for their Gulf hubs that millions of passengers pass through each year.

Philippine Labour Secretary Silvestre Bello said that the government was trying to ascertain the "real cause" behind the unexpected decision to lay off the workers.

The layoffs were reported earlier by ABS-CBN. It said the Filipino employees, including engineers and maintenance staff, were laid off on Tuesday and others had also lost their jobs.

State-owned Qatar Airways had warned it would report its third consecutive loss this financial year, which ends this month, before the outbreak battered global travel demand.

Dubai's Emirates has joined other airlines around world in asking pilots to take unpaid leave.

"You are strongly encouraged to make use of this opportunity to volunteer for additional paid and unpaid leave," the airline said in an internal email to pilots.

Emirates, one of the world's biggest international airlines, did not immediately respond to an email request for comment.

Tourism and aviation are vital to Dubai's economy, which does not have the vast oil wealth of some of its neighbours.

Emirates Group, which employed over 100,000 people, including about 4,000 pilots as of March 2019, asked staff to take unpaid leave earlier this month, although pilots were not included in the request then.

Emirates has told staff the coronavirus epidemic could be the biggest challenge it has faced in many years. The airline has frozen recruitment and continues to cut flights as the situation worsens globally.

In response to a Reuters query as to whether the Dubai government would provide support to its state aviation entities, the state media office sent a statement from the emirate's airport operator. Dubai Airports said it was working with business partners to mitigate the impact of the coronavirus but could not comment further as commercial arrangements were confidential.

Abu Dhabi's Etihad Airways on Wednesday announced another raft of flight cancellations, including to India and Egypt.

Global impact

The impact of the pandemic on the global tourism and travel industries continues to grow. The outbreak of the flu-like virus has wiped 41%, or $157 billion, off the share value of the world's 116 listed airlines, with many using up their cash so fast they can now cover less than two months of expenses, according to an analysis from Reuters news agency.

The International Air Transport Association (IATA) representing the sector said $200 billion in government support could be needed worldwide.

El Al Israel Airlines on Wednesday said it had sent 5,500 of its 6,000 workers on unpaid leave until May 31 after it slashed its flight schedule, while Australia and Taiwan joined the list of governments offering financial aid to airlines.

Australia's Qantas Airways Ltd on Tuesday announced plans to cut 90% of international capacity and its Singapore-based low-cost airline Jetstar Asia said it would stop flying altogether for three weeks from March 23 to April 15.

Australia's No. 2 carrier, Virgin Australia Holdings Ltd , said it would suspend all international flying from March 30 to June 14 and cut its domestic capacity in half, in a move that could lead to job losses. The Australian government said it would refund and waive charges to airlines such as domestic air traffic control fees worth $430 million as it advised citizens against all foreign travel.

Sweden and Denmark on Tuesday announced $300 million in loan guarantees for Scandinavian carrier SAS.

United Airlines Holdings Inc said it would cut 60% of its capacity in April, including 85% of its international flights.

Air New Zealand Ltd on Wednesday suspended trading for another two days to assess the financial implications of deep capacity cuts announced on Monday. Up to 30% of the airline's 12,500 staff will not be required, CEO Greg Foran said, adding that the carrier would offer leave without pay and voluntary redundancies before moving to job cuts.

US airlines have asked Washington for $50 billion in grants and loans, plus tens of billions in tax relief. Planemaker Boeing Co has called on the US government to provide at least $60 billion in access to liquidity, including loan guarantees, for the aerospace manufacturing industry as airlines halt deliveries and new orders to conserve cash.

Airbus has also signalled some government support may be needed if the coronavirus crisis lasts for several months.

Singapore Airlines Ltd plans to halve its capacity through the end of April, with further cuts possible as it braces for a "prolonged" period of difficulty.

"Make no mistake - we expect the pace of this deterioration to accelerate," CEO Goh Choon Phong said in a statement on Tuesday.

Global passenger numbers are expected to fall by as much as 30% this year with a full recovery not likely until 2022 or 2023, S&P Global Ratings said.

"At the risk of being alarmist, the airline industry is on the brink of collapse as governments are quarantining large portions of their populations and closing off borders," Cowen analyst Helane Becker told clients.