SYDNEY, March 18 ― Australia today joined a growing list of countries offering financial aid to its ailing aviation sector as global airlines announced deeper capacity cuts due to plummeting demand and stricter border controls associated with the coronavirus.
With airlines halting plane deliveries and new orders to conserve cash, Boeing Co called on the US government to provide at least US$60 billion (RM261 billion) in access to liquidity, including loan guarantees, for the aerospace manufacturing industry.
US carriers have already asked Washington for US$50 billion in grants and loans, plus tens of billions in tax relief.
“The long term outlook for the industry is still strong, but until global passenger traffic resumes to normal levels, these measures are needed to manage the pressure on the aviation sector and the economy as a whole,” Boeing said in a statement.
The Australian government said it would refund and waive charges to airlines such as domestic air traffic control fees worth A$715 million, including A$159 million upfront, as it advised citizens against all travel outside the country.
Sweden and Denmark yesterday announced US$300 million in loan guarantees for Scandinavian carrier SAS, becoming early movers in an expected rush of pledges to the sector.
The airline industry's main global body, the International Air Transport Association (IATA), said the total government support needed worldwide could reach US$200 billion.
“If we want to maintain a strong airline sector able to cope with this difficult crisis and provide the resources to ensure the recovery will happen in due time, we need governments to act strongly and quickly,” IATA Director General Alexandre de Juniac said.
US President Donald Trump said yesterday that travel restrictions within the United States are being considered, which would be a further blow to its domestic carriers.
“You can do a national lockdown. Hopefully, we're not going to need that,” Trump said. “It's a very big step.”
Asia-Pacific situation worsens
The situation in the Asia-Pacific region has worsened for airlines this week as governments have tightened travel restrictions.
Air New Zealand Ltd today suspended trading for another two days to further assess the financial implications of drastic capacity cuts announced on Monday.
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.
“We have entered an unprecedented time in the global aviation industry, which has required us to take significant action to responsibly manage our business while balancing traveller demands and supporting the wellbeing of Australians,” Virgin Chief Executive Paul Scurrah said in a statement.
Rival Qantas Airways Ltd on Tuesday announced plans to cut 90 per cent 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.
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,” Singapore Airlines CEO Goh Choon Phong said in a statement yesterday.
The Philippines' largest budget carrier, Cebu Air Inc said it was canceling all domestic and international flights starting from March 19 to April 14 as the country's main island is placed under enhanced quarantine measures.
Philippine Airlines said it will halt its international flights starting March 20. It started cancelling all domestic flights yesterday and said they will resume on April 13. ― Reuters
