Continued from page 40


only be possible if all commercial avenues have been fully explored.” Should the government act


to support individual carriers or airports, Sunak wrote: “Terms would be structured to protect taxpayers’ interest.” However, Sunak also noted:


“The transport secretary and his officials are willing to discuss industry-wide measures that could be helpful to deal with the immediate crisis.” Shapps promised measures


“shortly” last week. Air Operators Association


chief executive Karen Dee urged the chancellor to reconsider, saying: “Our industry will now have to fight on its own to protect its workforce and its future. A case-by-case approach with dozens of UK airports is simply not feasible.” As recently as March 3, airline


chiefs were denying suggestions they would need state aid. IAG chief executive Willie Walsh told an Airlines for Europe summit in Brussels: “Governments should stay away.” At the same event, Ryanair chief executive Michael O’Leary said: “The last thing we need is state aid. Let the bankrupt go bankrupt.” IAG and Ryanair also


threatened legal action when the government considered supporting Flybe before the carrier collapsed on March 5. The government resolved one


of the carriers’ concerns last week when it pledged to pay 80% of the wages of workers on unpaid leave up to a limit of £2,500 a month. Sunak also highlighted the


decision to defer VAT payments until the end of June, which should help cashflow, and dismissed the demand to suspend APD noting: “With fewer passengers flying, APD liabilities will be reduced.”


Lufthansa warns demand will be slow to recover


Ian Taylor


There will be no rebound to pre-crisis levels of demand this summer and no quick return to business as usual, Lufthansa Group chief executive Carsten Spohr has warned. Spohr gave a sharp analysis of the


issues facing major carriers late last week, insisting: “There will be no normal business development. Lufthansa won’t return to the old status and flying as usual. “We have a three-


month scenario for grounding. Once we restart, flights won’t be full overnight. You need booking room. It will start slowly. For the


summer 2020 season,


Spohr said: “I would be happy just to know we can start flying again. It would not be a full schedule, just a special schedule. We will need to get customers back and then rebuild our industry. Usually we handle 280 passengers a minute. It will be a long time before we see these levels again.” He insisted: “We are in a better


financial position than most of our competitors. Unlike other airlines we own a big majority of our fleet. But a crisis of such dimensions can only be overcome with contributions from other stakeholders. It is unimaginable not to envision structural changes in aviation.” Spohr


Carsten Spohr


said: “We have no incoming bookings any more.


Governments vow to support Alitalia, SAS and Norwegian


Several European governments have stepped in to bail out airlines. The Italian government will


take control of loss-making Alitalia, with the carrier’s fleet likely to be reduced to 25-30 aircraft, according to reports in Italy. The airline has been in


administration since May 2017 but still operates a fleet of 113 aircraft.


38 26 MARCH 2020


Intercontinental flights will stop almost completely. Frankfurt will remain our only hub [and] from there we will offer 30 flights a day.” The group has put 31,000


employees on short-time working for up to 12 months. Spohr said: “Employees ask ‘How


long can Lufthansa continue?’ I can only say we will stay longer than our competitors. Our balance sheet is strong and our indebtedness much lower than most competitors’. “Should the situation not improve,


we need to talk about the supply of flights from a political point of view because from a commercial point of view flights will not make sense. What happens now will reduce the size of the world economy. Lufthansa Group as a result will shrink.” Asked about state aid to carriers,


Spohr said: “If we take out big loans, airlines stand no chance of survival. “The [German] government is


very clear that it will help if there are liquidity problems.”


The government in Rome has


set aside €500 million to support airlines, with most due to go to Alitalia. The EU opened a probe into a previous Italian government loan of €400 million to Alitalia only last month and has yet to complete an investigation into loans totalling €900 million to the carrier in 2017. The Danish and Swedish


governments pledged to provide credit guarantees of Kr3 billion (£254 million) to SAS Scandinavian Airlines last week, while Norway’s government agreed to provide carriers with credit guarantees worth up to Nok6 billion (£460 million).


Alitalia SAS will have access to Nok1.5


billion, while Norwegian Air could obtain up to Nok3 billion if shareholders provide more cash. Norwegian Air has a hub at


Gatwick and has laid off 90% of staff. travelweekly.co.uk


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44