Home » World » Coronavirus: airlines, cruise ships cut services and prepare for losses

Coronavirus: airlines, cruise ships cut services and prepare for losses

With the coronavirus epidemic causing new travel restrictions, airlines, cruise lines and other travel businesses climbed Thursday to mitigate the financial blow that some industry experts were confronting with what followed the attacks. terrorists of 11 September 2001.

Hours after President Trump announced new restrictions on travel between the United States and Europe, airlines began arguing with employees about how to reduce the workforce through voluntary acquisitions and other options. At least one foreign carrier has announced worker layoff plans.

“I am concerned that this is wider than 9/11,” said Lori Bassani, president of the union representing American Airlines flight attendants. After those attacks two decades ago, flights were stopped nationwide for three days. The Americans’ reluctance to fly lasted months. The drop in demand has resulted in serious losses for airlines.

Princess Cruises, a Carnival Corp. subsidiary, announced Thursday morning that it will suspend operations for 60 days. The move came after 21 people on his Grand Princess ship tested positive for the virus, triggering delays and quarantines for thousands.

“By taking this bold action of voluntarily pausing the operations of our ships, it is our intention to reassure our loyal guests, team members and global stakeholders of our commitment to the health, safety and well-being of all those who sail with us. , as well as those who have business relationships with us and the countries and communities we visit around the world, “said Jan Swartz, president of the cruise line, in a statement.

The cruise company of Santa Clarita said it had plans to dock all cruise ships in the nearest available port and transport passengers home.

Also on Thursday, Viking Cruises said it would suspend operations until May 1st. Viking said it would allow passengers up to 24 months to rebook their canceled trips.

After Trump announced the new travel restrictions on Wednesday evening, administration officials made it clear that the restrictions would not apply to U.S. citizens and their close relatives, nor to permanent residents of the United States. According to the policy, most foreign nationals are barred from entering the United States within 14 days of the passport-free travel area in Europe, known as the Schengen area.

The new restrictions, which will enter into force on Friday, led to a wave of airline passengers trying to reschedule flights between the United States and Europe. The result was long hours of waiting on reservation phone lines and reactions on social media.

The new travel restrictions would mean the reduction of nearly 7,000 flights between the United States and Europe, with approximately 2 million seats, in each direction in the next four weeks, according to an estimate by the flight data company OAG.

Flight restrictions would affect nearly 11% of all flights from the United States, according to OAG. Delta and United Airlines would be the hardest hit, accounting for 31% of the flights affected.

European low-cost airline Norwegian Airlines announced Thursday that it was cutting 4,000 flights and laying off almost half of its staff.

Earlier in the week, United Airlines reported that internal reservations had dropped 70% in the past few days and that it was prepared to drop overall revenue from 60% to 70% from April to June.

The global airline industry, which has reported an increase in demand over the past decade, could be hit with revenue losses of $ 113 billion in 2020, with carriers in the U.S. and Canada taking in about $ 20 billion of that shot, according to a recent estimate by the International Air Transport Assn., a commercial group for airlines in the world.

“Suspend travel on such a large scale [as Trump outlined Wednesday] it will create negative consequences for the whole economy, “said the general manager of the trade group, Alexandre de Juniac, in a statement.” Governments must recognize this “and provide support to the sector, he added.

Sara Nelson, president of the Assn. Flight Attendants-CWA, which represents 50,000 flight attendants from 20 airlines, called the new restrictions “irresponsible”, stating that the move “only creates more confusion and shows that it is politics, not public safety.”

The industry is already in turmoil as people choose not to travel for fear of catching and spreading the coronavirus.

“Temporary suspension of travel from Europe will increase the already heavy impact of coronavirus on the travel industry and the 15.7 million Americans whose jobs depend on travel,” said Roger Dow, President of the United States Travel Assn . commercial group.

Industry insiders say U.S. airlines are far more prepared to absorb losses than the 9/11 attacks, when falling demand led some airlines to seek bankruptcy protection.

Thanks to nearly a decade of growing demand for relatively cheap jet fuel and travel, U.S. carriers have reduced debt and accumulated cash reserves, said Henry Harteveldt, an analyst with an airline from Atmosphere Research Group. And a series of mergers has consolidated the industry to a handful of large and financially stable couriers.

“US airlines are certainly better placed to face this challenge than some foreign airlines,” he said.

The spring holiday travel season cannot be made up for, but airline executives and other travel industry leaders have expressed hope that the crisis can be contained in time to take advantage of the peak summer season.

Airlines offered to waive booking modification fees to allow customers to rebook new flights up to one year after purchasing the ticket. Princess Cruises has offered to transfer 100% of the money paid for cruises to future cruises, in addition to additional credits that can be spent on board expenses.

Bassani, the Assn. from the President of Professional Flight Attendants, she said that she and American Airlines executives discussed ways to reduce staff without firing flight attendants, such as offering early acquisitions to some workers and assigning absences to others. unpaid for three to six months.

“These are unprecedented times for our sector and our union,” he said.

Leave a Comment