Coronavirus spells doom for the world’s aviation industry

On Monday, state-owned Thai Airways (THAI) announced that the company was grounding 12 planes to cope with less demand due to the outbreak of coronavirus.

The number of THAI’s flights has decreased by 20-30 per cent since the outbreak which led to the decision. The grounding operation has started since March 10 to lower operation cost, said Cherdphan Chotikhun, executive vice president of the airline’s Technical Department.

The 12 grounded planes will bring the number of THAI planes grounded to 24 which means they will now have 56 planes in operation from a fleet of 80.

The decision by THAI was not unique, airlines across the world are making major adjustments.

The covid-19 outbreak has signaled a major downturn in the aviation industry, one that was already suffering from poor global sentiment, rising fuel prices, and increased competition.

Emergency Measures

On Tuesday, US President Donald Trump said that emergency federal aid was being prepared for the airlines industry.

“We don’t want airlines going out of business,” he told reporters.

According to publications in the United States, American-based airlines are seeking at least $50 billion in emergency aid.

Treasure Secretary Steve Mnuchin told reporters that he had spoken to the CEO of major US airlines to talk about how best to spend that aid.

“This is worse than 9/11 for the airline industry,” Mnuchin said after the meeting. “[The airlines industry] has almost ground to a halt.”

The moves by the US government was in-line with other governments looking to rescue their ailing aviation sectors.

The Australian Government announced that it would provide a $715 million relief package, including fee waivers, to support its airlines industry.

The move comes after Virgin Australia said it would suspend all international flights until June and reduce domestic flights by 50 per cent.

Qantas also said it would be closing 90 per cent of international flights and 60 per cent of domestic flights starting on the first of April.

In Italy, the Italian government said it would re-nationalize flag-carrier Alitalia after the airline declared bankruptcy.

The plan was part of the country’s covid-19 rescue plan. It could cost the Italian taxpayer up to $670 million to take over Alitalia.

The problems are not limited to Western Countries. Korean Air has also started grounding aircraft as demand drops in one of the world’s hardest-hit countries.

It announced last week that it would ground all 10 of its A380s and 90 other aircraft. In total, the airline will cut 80 per cent of its capacity by the end of March.

Boeing and Airbus reeling too

Boeing has been sinking steadily for some time after it emerged that the company was culpable for two disastrous crashes in Ethiopia and Indonesia. The production of the 787 MAX, which was supposed to be the bread and butter fuselage for the company, has not resumed since it was suspended last year.

The company was part of the group of airline companies to meet with Steve Mnuchin to ask for a bailout.

Airbus, which benefited from Boeing’s bad year said that the coronavirus has also affected its business. The company said it was halting its production in France and Spain while it figures out a course of action to deal with local outbreaks.

The company said that the break would “allow sufficient time to implement stringent health and safety conditions in terms of hygiene, cleaning, and self-distancing while improving the efficiency of operations under the new working conditions.”

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