The US offered 58 billion USD in financial aid to the airlines

Governments around the world are giving new impetus to their efforts to help airlines severely affected by the downturn caused by the coronavirus pandemic.

In this regard, the United States offered 58 billion USD in aid to the airlines, while Singapore, for its part, pledged to support its national carrier and Australia decided to ease competition rules

AirAsia, the largest carrier in the region, has become the next airline to announce extensive layoffs in response to the worsening crisis caused by the coronavirus. The airline said some of its units would stop the flights altogether for some time.

“No one can survive in this situation for more than a few months when you have this unprecedented 95% drop in passenger numbers, and in some cases even 100% while maintaining fixed costs”, said Brendan Sobie, an aviation analyst to Singapore.

In a desperate attempt to keep some of their revenue and maintain global supply chains, Air Air Lines, Air New Zealand and Etihad Airways have joined the list of carriers that have turned their fleet of passenger planes into cargo carriers.

About half of the world’s air cargo usually travels in the cargo compartments of passenger planes, so cancellation of passenger flights results in a sharp reduction in cargo capacity, which has consequences for food, industry and other vital trade.

“For airlines, this is already an apocalypse”, said Alexandre de Juniac, CEO of the International Air Transport Association (IATA), which represents carriers worldwide. “Travel restrictions and the evaporation of demand mean that besides freight, there is almost no travel business”, added he.

In an unprecedented move, the US Senate has adopted a 58 billion USD package, half of which will be grants to cover the salaries of about 750,000 airline staff. Those recipients will not be able to fire employees before September 30 or change collective bargaining agreements.

The bill has restrictions on the redemption of shares, dividends, and payments to company executives and allows the government to take capital, guarantees or other compensation as part of the bailout package.

The US House of Representatives is expected to support the move on Friday, with President Donald Trump promising to sign it.

US airlines, like others around the world, are also suffering from a decline in passenger numbers.

United Airlines Holdings said its capacity would decline by 68% in April and Alaska Air Group cut its flight schedule by 70% in April and May. American Airlines stopped paying dividends and drew a 400 million USD credit line.

IATA, which estimates the pandemic will cost the global industry 252 billion USD in lost revenue this year, said it has addressed 18 countries in the Asia-Pacific region, including India, Japan and South Korea, in an emergency support for carriers.

Singapore’s finance minister said Singapore Airlines Ltd will soon announce “corporate action” backed by state investor Temasek Holdings to tackle the crisis. Trading with the carrier’s shares, which said this week it was seeking additional funds, was terminated on Thursday.

Malaysian budget airline AirAsia Group has said it has suspended some of its international and domestic flights, while its flights to India and the Philippines cease all flights.

Australia and New Zealand have joined the initiative, announcing that they will provide some financial relief. However, companies there continue to lay off employees or send them on unpaid leave.

In a move unimaginable under normal circumstances, the Australian competition regulator said it would allow Virgin, Qantas Airways and Regional Express to coordinate flight schedules and share revenue across 10 regional routes.