Aer Lingus owner plunges as airlines go into survival mode

Shares in Aer Lingus owner IAG plunged 9% and Ryanair fell more than 1% as the crisis for international airlines, in the wake of the spread of the Covid-19 virus, deepened.

Aer Lingus owner plunges as airlines go into survival mode

Shares in Aer Lingus owner IAG plunged 9% and Ryanair fell more than 1% as the crisis for international airlines, in the wake of the spread of the Covid-19 virus, deepened.

German carrier Lufthansa warned the industry might not survive without state aid if the coronavirus pandemic lasts a long time, and Australia’s Qantas Airways told most of its 30,000 staff to take leave.

Elsewhere, EY has taken control of Connect Airways – the holding company of recently collapsed Flybe and Aer Lingus Regional operator Stobart Air – with it falling into administration. Stobart Air is now 51% owned by staff and 49% by EY.

The United Nation’s International Civil Aviation Organisation called on governments to ensure cargo operations are not disrupted to maintain the availability of critical medicine and equipment such as ventilators and masks that will help fight the virus.

“The spread of the coronavirus has placed the entire global economy and our company as well in an unprecedented state of emergency,” Lufthansa CEO Carsten Spohr said. “At present, no one can foresee the consequences.”

His comments echo other industry executives who have called for state support now that passenger operations are collapsing at an unprecedented rate as governments curb travel drastically and demand slumps.

Lufthansa, which has parked 700 of its 763 aircraft, said it did not need state support yet as it slashes costs, but painted a bleak picture for the industry and its suppliers.

Mr Spohr said his company was in talks with planemakers Airbus and Boeing about whether to take delivery of aircraft it had ordered, and on payments.

“We had planned this year to receive a new plane every 10 days - now we don’t need any,” he said.

He predicted the industry would emerge into “a different world” after the crisis, saying the need for airline partnerships would only become more pressing.

Global airlines group IATA has forecast the industry will need up to $200bn (€183bn) of state support, piling pressure on governments facing demands from all quarters and a rapid worsening in public finances as economies slump.

Shares in US airlines fell sharply after Washington proposed a rescue package of $50bn in loans, but no grants as the industry had requested, to help address the financial impact from crisis.

The Trump administration’s lending proposal would require airlines to maintain a certain amount of service and limit increases in executive pay until the loans are repaid.

India is planning a rescue package of up to $1.6bn to aid carriers battered by coronavirus.

New Zealand outlined the first tranche of a NZ$600m aviation relief package, as it announced plans to shut its borders to non-citizens and non-residents.

- Additional reporting Reuters

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