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Coronavirus-stricken airlines call for aid to limit bankruptcies

A worker sprays disinfectant inside the cabin of a Lion Air passenger jet as a precaution against the new coronavirus, at Soekarno-Hatta International Airport in Tangerang, Indonesia, Tuesday, March 17, 2020. For most people, the new coronavirus causes only mild or moderate symptoms. For some, especially older adults it can cause more severe illness. (AP Photo)

A worker sprays disinfectant inside the cabin of a Lion Air passenger jet as a precaution against the new coronavirus, at Soekarno-Hatta International Airport in Tangerang, Indonesia, Tuesday, March 17, 2020. For most people, the new coronavirus causes only mild or moderate symptoms. For some, especially older adults it can cause more severe illness. (AP Photo)

Published Mar 17, 2020

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London - European airlines

demanded urgent tax relief to avoid multiple bankruptcies as

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coronavirus disruption continued its spread across the global

industry on Tuesday.

As the region's transport ministers prepared to discuss

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financial support, the Airlines for Europe group called for

widespread tax deferrals "to ensure that as many airlines as

possible survive" the crisis.

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The call came as the aviation industry's main global body,

IATA, said that the total support needed from governments

worldwide could reach $150 billion to $200 billion.

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The sector's appeals are becoming more strident as airlines

continue to ground planes, drop routes and cut jobs in response

to unprecedented travel restrictions to limit the spread of the

virus, including the closure of EU borders.

Job cuts are adding to pressure on governments. IAG-owned

British Airways informed unions on Tuesday that it

planned to make an unspecified number of pilots redundant.

"We are extremely disappointed that a company like BA, with

a strong balance sheet and cash reserves, has rushed into

redundancy consultation," said Brian Sutton, the head of pilots'

union BALPA.

"This is the biggest crisis the aviation industry has faced

in decades. Without more government support we fear the impact

will be far greater."

Most major airlines have made drastic, unprecedented

schedule cuts - often bringing operations to a near halt - as

restrictions bite and demand dries up.

Brussels Airlines, a Lufthansa subsidiary, on

Tuesday said that it will suspend all flights for four weeks.

Singapore Airlines also cut more capacity, Emirates

suspended dozens of destinations and Canada's WestJet halted

international services.

The Philippines' Cebu Air cancelled all flights

from March 19 and Jetstar Asia announced a three-week shutdown

after parent Qantas cut its own capacity by 90%.

JOBS PRESSURE

U.S. airlines have asked Washington for $50 billion in

federal grants and loans, plus tens of billions in tax relief.

In a letter to political leaders, United Airlines

management and unions pleaded for urgent financial support to

"allow United to continue paying our employees as we weather

this crisis, protecting tens of thousands of people".

Boeing has also held talks with White House officials

on possible assistance. European arch-rival Airbus said

on Tuesday that it was halting production in France and Spain as

coronavirus lockdowns affect workers and suppliers.

The global airline industry will need "something like $150

billion to $200 billion" from governments including loan

guarantees, IATA head Alexandre de Juniac told reporters on

Tuesday.

The coronavirus is "now covering markets that represent 94%

of global passenger revenue", the Geneva-based organisation's

chief economist, Brian Pearce, said in the same presentation.

Three quarters of airlines now have liquidity covering less

than three months of unavoidable fixed costs, Pearce said.

"The majority are in a very fragile place," he added.

EU transport ministers will meet by video-conference on

Wednesday, an official said. Governments including those of

France, Germany, the Netherlands and Britain have expressed

readiness to extend financial support to airlines.

Lufthansa is expected to receive a government cash

injection, one German banker told Reuters.

The flag carrier is also making plans for an emergency cargo

airlift on a scale not seen since the 1948-49 blockade of

Berlin. 

Reuters 

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