Foreign Affairs
Runways turn into carparks – the pandemic which has clipped the wings of airplanes all over the world

The aviation industry is at a standstill with thousands of airplanes on the apron rather than in the air. The CDEO of the second largest airline in Europe, Lufthansa, Carsten Spohr said the the industry is losing billions of Euros and has warned that it will collapse if it is not given State aid.

In the United States, Congress has approved a bailout of more than $50 billion for airlines.

The aviation industry has been brought to its knees, because the Coronavirus pandemic has  literally clipped the wings of around three fourths of the flights in Europe and one third of flights around the world.

The few flights which are operating have hardly any passengers on them as travelling has been completely brought to a halt. The map of the airspace over Europe which up to two weeks ago was full of planes, now barely shows one airplane flying. Most of these flights are carrying merchandise.

Airlines such as Ryanair, Easyjet and Emirates have stopped almost all passenger flights, which has resulted in financial repercussions of billions of Euro. Ryanair is considering the next two months as being a financial loss, but said that it has €4 billion in reserves, so it can withstand this loss.

The Chief Financial Officer of Lufthansa, Ulrik Svensson, said that the airline has around 700 planes which have been grounded. “There have been very strong statements from the German government that they will help with liquidity in case there will be liquidity problems for German corporate life. So I think that will take care that Lufthansa will for sure be continuing after the corona crisis and actually be a winner.”

The CEO of Lufthansa, Cartsen Spohr, said that the company has €5 billion in reserves but if this crisis is long-term it will not be able to operate without the Government’s help.

State aid can now be granted after the European Commission relaxed its regulations on State aid to commercial companies. This measure may prove to be a lifesaver for airlines such as Norwegian Air, Scandinavian Airlines and Air Malta.  Norwegian Air has already laid off 7,300 employees.

Emirates, while stopping its passenger flights, has guaranteed the employment of its employees although it has reduced their pay by 25 – 50 % for the next three months.

Airlines such as British Airways and Ibera, however, do not agree with State Aid to airlines which were already on the brink of bankruptcy.

It is estimated that the spread of the Coronavirus will leave a financial hole of more than $250 billion in the aviation industry around the world, and as a result the industry will no longer be the way it used to.

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