Global airline companies on Thursday have figuratively begged for help from the government as American carriers scrambled to reduce flights to Europe in the midst of a new US travel ban aimed at containing the coronavirus pandemic.
Airline stocks unsurprisingly collapsed after US President Donald Trump implemented a 30-day travel ban from most parts of Europe, hiking the risk that airlines trying to manage the shockwave from the virus could be depleted of cash in the next few weeks, prompting mass job cuts and emergency government bailouts.
Crisis-battered sector stocks started to plunge after the US announced it would bar foreign nationals coming from the Schengen region of the European Union. Most have shed around 15 percent of their market value, and over the last three weeks, they have now fallen over 50 percent.
The airline industry is already facing an economic hit of $113 billion from the effects of the outbreak on passenger numbers. Market observers project this sales drop could rise from the new travel ban. There are worries that some weaker companies could go totally down.
With more incidents occurring in the U.S., the chief executive and president of United Airlines told staff that they anticipate "the need to coordinate an effective approach will expand in more locations."
For at least one airline, the estimate was instant. Norwegian Air, a highly indebted discount carrier said that it would be cutting more than 4,000 services and indefinitely laying off up to 50 percent of its staff on Thursday after its stock dropped 21 percent.
According to data from the OAG aviation analysts, the collective decision by the US will impact 13,500 flights and 4 million, passengers over the next four weeks.
The International Air Transport Association cautioned that the decision could see carriers falling apart and many would require urgent rescue interventions.
Many carriers are still under the immense pressure from coronavirus impact, and commercial flights have been scrapped all over the world. Korean Air has reported that the effects of the virus could endanger its sustainability and UK airline Flybe, that was already suffering, plummeted last week, stating that the emergence of the pandemic was partly responsible.
US airports said they anticipated to lose at least $3.7 billion this year - an estimation rendered prior to the actual new European constraints. The 30-day US prohibitions would seriously interrupt transatlantic traffic essential to profits from major European airlines and their US airline affiliates, economists have advised.
