Airlines cancel flights and lay off workers as stocks plummet
Airlines now stand to lose millions of dollars in revenue from a dramatic decline in trans-Atlantic flights, which account for a big chunk of their business.
Airlines around the world Thursday scrambled to cancel flights, lay off workers and reassure anxious travelers, capping a dizzying period of weeks in which bookings have evaporated and investors have lost confidence in the industry.
The latest frenzy was touched off by President Donald Trump’s announcement Thursday that, beginning Friday night, most travelers from 26 European countries would be barred from visiting the United States for 30 days, news that sent airline stocks tumbling. Shares of United Airlines and Delta Air Lines closed down by more than 20%, and American Airlines was down about 16%. Earlier, shares of the parent company of British Airways closed down 16% in London.
Already reeling from a steep decline in bookings because of the coronavirus outbreak, airlines now stand to lose millions of dollars in revenue from a dramatic decline in trans-Atlantic flights, which account for a big chunk of their business.
On Thursday, Norwegian Air, a once fast-growing discount carrier that flies to many U.S. cities, said it would temporarily lay off half of its staff and ground 40% of its long-haul flights and 25% of shorter flights.
“Suspending travel on such a broad scale will create negative consequences across the economy,” said Alexandre de Juniac, chief executive of the International Air Transport Association, an industry group. “
According to the association, last year, about 200,000 flights carried passengers between the United States and the 26 countries targeted in Trump’s order, averaging about 550 flights carrying 125,000 travelers per day.
Over the next four weeks, the ban would affect more than 6,700 flights, in each direction, according to an analysis by OAG, an aviation data provider. Delta is the airline most affected, operating 17% of those flights, according to OAG. United is next, with 14%, followed by Lufthansa, with 13%. American ranked fourth, operating about 8% of the affected flights.
Delta said that once the ban takes effect, it would temporarily suspend flights between Paris and Cincinnati, Indianapolis, North Carolina’s Raleigh/Durham and Salt Lake City. The airline will also freeze flights between Amsterdam and Orlando, Florida; Portland, Oregon; and Salt Lake City. United said it would continue to fly its existing schedule between the United States and Europe through March 19. After that, it expects to continue serving Amsterdam; Brussels; Frankfurt, Germany; Munich; Lisbon, Portugal; Paris and Zurich.
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