An aircraft operated by British low cost airline Easyjet moves past other aircrafts as a rainbow is seen at Amsterdam Airport Schiphol on March 9, 2020 in Schiphol, Netherlands.
Yuriko Nakao | Getty Images
President Donald Trump’s surprise announcement to ban visitors from most of Europe amid the coronavirus pandemic is going to add to airlines’ financial pain and potentially drive some carriers out of business, an industry group warned Thursday.
Airlines are reeling from the spread of the coronavirus, which has infected more than 100,000 people and forced airlines around the world to slash service and freeze hiring or lay off workers in a bid to preserve cash.
The International Air Transport Association, which represents most of the world’s airlines, earlier this month forecast that the virus could cost carriers worldwide more than $100 billion in revenue this year.
“That scenario did not include such severe measures as the U.S. and other governments (including Israel, Kuwait, and Spain) have since put in place,” the group said in a statement.
Trump on Wednesday announced travel restrictions from most of Europe to the U.S. for 30 days as COVID-19 continues to spread. The new rules, which take effect Friday just before midnight, don’t ban flights outright but rather prohibit foreigners who have been in Europe in the last two weeks from entering the country. The ban applies to the 26 countries in the so-called Schengen Area of Europe, which does not include the U.K. and Ireland.
The measure sowed confusion among airline crews, and carriers scrambled to respond by canceling flights and capping airfares for travelers trying to get back to the U.S.
“The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” European Council President Charles Michel and European Commission President Ursula von der Leyen said in a statement.
Last week, British regional carrier Flybe collapsed. On Thursday, Norwegian Air Shuttle, a budget European carrier that has expanded aggressively with trans-Atlantic flights in recent years, said it would lay off half of its employees and slash thousands of flights.
The European ban is set to strain the carriers further.
“This will create enormous cash-flow pressures for airlines,” IATA’s director general Alexandre de Juniac said in a statement. “We have already seen Flybe go under. And this latest blow could push others in the same direction.”
He said airlines will need emergency measures and that governments should consider extending lines of credit, lowering infrastructure costs and tax cuts.
Source: Business - cnbc.com
