Coronavirus cash crunch for airlines and airports


As Boeing and other US aviation companies angle for billions in assistance, airlines and airport operators globally are suspending dividends, selling airplanes and flying cargo on passenger jets amid plunging demand caused by the pandemic.

Boeing confirmed it is in talks with senior White House officials and congressional leaders about short-term assistance for the US aviation sector, including suppliers, airlines and airports.

US airlines and cargo carriers are seeking at least $58 billion in loans and grants with additional tax changes, while airports want $10 billion.

European airlines stepped up calls for emergency government aid, as Airports Council International Europe said passenger traffic across the region fell by an average of 54% last week and the situation would worsen as borders closed.

“It’s now fair to call this the single biggest shock global aviation has ever experienced,” Qantas Airways Chief Executive Alan Joyce said in a memo to the airline’s 30 000 staff.

Joyce has worked in the industry for over 30 years, including the 9/11 attacks and led Qantas through the global financial crisis in 2008-2009.

The Australian carrier announced plans to cut international capacity by 90% and domestic capacity by 60% until at least the end of May, grounding the equivalent of 150 planes in response to new travel restrictions.

“Our goal is to protect as many jobs as possible and make sure we remain strong enough to ride this out,” Joyce told staff in the memo seen by Reuters.

New Zealand’s Auckland International Airport would scrap its interim dividend on top of cost-cutting measures including a hiring freeze and a halt to discretionary spending.

Air New Zealand would cut capacity to Australia by 80% from March 30 to June 30 after both countries said all travellers would need to self-isolate for 14 days after arrival.

Australian airports are set to lose more than A$500 million ($306.45 million) in take-off and landing fees this year as capacity plunges, the Australian Airports Association said.


Qantas last week told analysts it was looking to raise a few hundred million dollars by refinancing some aircraft.

Simon Birmingham, Australia’s Minister for Tourism said neither Qantas nor smaller rival Virgin Australia have asked for a bailout but government had not ruled out assistance.

“They believe they are viable and have strong cash positions. We want to make sure we maintain confidence in the airlines,” Birmingham told reporters.

Hong Kong’s Cathay Pacific Airways agreed a $703.8 million deal with lessor BOC Aviation) to sell and lease back six Boeing 777-300ER airplanes to raise much-needed cash.

The carrier, one of the earliest and hardest hit by the outbreak due to its proximity to mainland China, said its full-service airlines, Cathay Pacific and Cathay Dragon, made an unaudited loss of HK$2 billion ($257.5 million) in February.

Cathay Pacific will cut up to 90% of capacity in April, up from an earlier plan of 65% announced alongside its annual results last week.

“If we do not see a relaxation of travel restrictions in the near future, we expect the same arrangement will continue into May,” Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said in a statement.

Japan’s ANA Holdings would cut 2 630 more international flights serving 58 routes across its network between March 29 and April 24.


The only bright spot for airlines is the cargo market, where rates are surging as a result of capacity loss in the belly of passenger aircraft as flights are cut.

Cathay Pacific and Korean Air Lines are both fly aircraft without passengers to transport cargo due to high demand.

Qantas would use some domestic passenger aircraft for freight-only flights to replace lost capacity from regular scheduled services and its fleet of freighters would continue to be fully utilised.

Freight Investor Services reported a surge in prices across all Asia-Pacific routes. “2020 is fast becoming year of the freighter,” it told clients.

Singapore Airlines reported a higher cargo load factor in February than the prior year, but said on the passenger side, market conditions continued to deteriorate in March.