America’s three largest airlines are in crisis talks with the US government for aid as travel demand sinks due to the coronavirus outbreak.
United, American Airlines Group, and Delta Air Lines confirmed talks on Friday.
The virus outbreak has caused United Airlines Holdings to book $1.5bn less revenue in the first half of March than the same time last year. The company also warned that planes could start flying nearly empty, even after cuts to its schedule.
The company’s stock price dropped from $80.24 in mid-February 2020 to a low of $35.25 at the time of writing, which is the lowest it has traded in years. The company suffered a 15.2% ($6.34) drop in the last several hours.
Other airlines companies were also forced to cancel flights
Delta Air Lines stock price is currently sitting at $33.10 while dropping by 13.7% ($5.26), The price is significantly lower than in mid-February when it sat at $58.72.
Delta chief executive Ed Bastain said last week he would forgo his own salary for the next six months in order not to put the carrier’s staff out of work.
American Airlines also saw a major drop in its stock price, which was at $28.63 in mid-February of this year. At the time of writing, the price is at $11.80, after seeing a 17.5% ($2.55) drop in the last several hours. This Sunday, March 15th, the company once again announced schedule changes in response to a drop in customer demand.
The carrier will begin a phased suspension of almost all long-haul international flights, starting today.
Reuters- American Airlines Group Inc on Saturday said it will implement a phased suspension of nearly all long-haul international flights starting March 16, amid reduced demand and travel restrictions due to the ongoing coronavirus outbreak.
— Eric Lipton (@EricLiptonNYT) March 15, 2020
Europe is also facing calls to prop up its airlines. European Union executive vice-president and competition commissioner Margrethe Vestager last week signalled that her office was drafting EU-wide guidelines that would allow member states to act much faster to help ailing sectors.
Peter Norris, chairman of Virgin Group, a majority shareholder in UK carrier Virgin Atlantic, has urged the UK government to provide up to £7.5bn of emergency state support to rescue Britain’s aviation industry. The French government is also preparing a state-aid package to help Air France-KLM.
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