©2020 CHANNING

Airlines fear survival, CEO's say coronavirus declines become worse than 9/11 aftermath


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The Coronavirus outbreak raises fears of airline executives as less passengers continue to fly and planes are forced to be grounded.


The 2019 Novel Coronavirus outbreak has now become its own crisis in the friendly skies. Airlines around the world are preparing for pay cuts, layoffs and some fear their fate after noting the demand for flights have fallen more as a result of coronavirus than it had after the September 11 attacks.


JetBlue CEO Robin Hayes told CNBC on Mar. 10 that the 9/11 aftermath resulted in a 30% decline for the airline industry from August 2001 to October 2001. He said the industry is already experiencing percentages that top the 9/11 decline as a result of the coronavirus situation.


“Right now, what we’re seeing as we go into March and April is something that has dropped off more than that,” Hayes told CNBC.


The decline in bookings, according to CNBC, has caused JetBlue to pull its first-quarter and full-year earnings forecast, and has forced the airline and others to make adjustments to their flight schedules between March and early May.


Since the initial spread of the virus in January, several airlines around the world altered flight schedules and increased sanitation efforts on their planes, hoping that people would continue to fly.


Southwest Airlines CEO Gary Kelly said the coronavirus has created a fear of flying that has a “9/11 – like feel”, CNBC reported.


On Mar. 11, President Trump issued a travel ban on many foreign travelers from Europe for the next 30 days, according to NBC News. The ban that went into effect Mar. 13 and has restrictions that apply to foreign nationals and not U.S citizens, green card holders or families of U.S citizens.


Wired Magazine reported that all travelers coming from Europe must enter the U.S. via one of the 11 Centers for Disease Control and Prevention (CDC) approved airports, which will screen passengers for illness and have quarantine facilities.


Following Trump’s announcement, Delta and American Airlines announced that they will reroute passengers to the CDC’s approved airports and will suspend flights heading elsewhere, according to Wired.


German carrier Lufthansa is planning to continue serving Chicago, Newark and Washington, DC, but will suspend other U.S. flights and Finland’s Finnair will see a cancellation of all flights to the U.S by Mar. 19, Wired reported.


The move to cancel flights and the decline of passenger numbers is prompting some sort of life-support for some carriers.


On Mar. 10, the BBC reported that Korean Air’s survival is being threatened by the outbreak. The international airline has cut more than 80% of its capacity and has encouraged its employees to take voluntary leaves as the airline is unable to predict how long the crisis would last.


“But if the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company’s survival,” Woo Kee-hong, Korean Air’s president said in the memo.


Budget airline Norwegian Air is planning to cancel 4,000 flights and will temporarily layoff about half of its staff, according to a BBC report. The airline’s chief executive Jacob Schram said on Mar. 12 that outbreak aftermath was unprecedented for the airline.


“We have initiated formal consultation with our unions regarding temporary layoffs for flying crew members as well as employees on the ground and in the offices,” he said.


British Airways CEO Alex Cruz sent a video message to its employees on Friday with the message titled, “The Survival of British Airways,” according to the BBC.


In the message, Cruz warned that jobs could go as a result of the impact of coronavirus on the airline’s business and believes that the industry is facing a global crisis that is worse than 9/11.


“We can no longer sustain our current level of employment and jobs would be lost – perhaps for a short term, perhaps longer term,” Cruz said Friday in the video message transcript posted on Twitter.


Cruz said that the airline is suspending routes and will be grounding aircraft in ways that they have never seen before. He also encouraged employees to not underestimate how serious the crisis is for the company.


“We will continue to do our best for customers and offer them as much flexibility as we can,” Cruz said. “We are taking decisive steps to protect our cash prostitution and to protect jobs.”