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* Shares plunge as crisis decimates capacity
* Air France cuts capex, IAG postpones CEO retirement
* Global airline alliances call for aid
By Sarah Young and Laurence Frost
LONDON/PARIS, March 16 (Reuters) - Airlines made
unprecedented cuts to flights, costs and staffing on Monday, and
stepped up calls for emergency government aid, as coronavirus
lockdowns and new travel restrictions hit more major routes.
Already battered shares in British Airways parent IAG
, easyJet and Air France-KLM plunged
again as they scrapped most of their flights for the coming
weeks, joining other major carriers that are all but halting
operations in the face of the pandemic.
"It is now clear that the coronavirus is by far the biggest
crisis in the history of aviation," Finnair Chief Executive Topi
Manner said as the carrier announced a 90% capacity reduction
and its second profit warning in three weeks.
The outlook darkened further after Spain declared a state of
emergency and the United States extended travel curbs to Britain
and Ireland, while Australia and New Zealand began requiring all
travellers to self-isolate.
In an unusual joint statement, the world's three main
airline alliances - oneworld, SkyTeam and Star Alliance - called
for government aid to alleviate the "unprecedented challenges"
faced by the industry.
IAG, which also owns Spain's Iberia and Vueling, said it
would cut April-May capacity by at least 75% and postpone CEO
Willie Walsh's retirement - keeping successor Luis Gallego at
Iberia's helm as the group navigates the crisis.
Besides cancelling flights, the group announced moves to
freeze discretionary spending, reduce working hours and
temporarily suspend employment contracts.
Low-cost rival easyJet said it would likely ground most of
its fleet as it joined Virgin Atlantic in calling for government
support.
"European aviation faces a precarious future, and it is
clear that coordinated government backing will be required to
ensure the industry survives," CEO Johan Lundgren said.
IAG's shares were down 21.3% at 1014 GMT, with Wizz Air
down 19.5%, easyJet down 16.9% and Air France-KLM 16.8%
lower.
"Airlines are siphoning cash and have no way of stopping it"
as bookings grind to a halt and traffic collapses for six to
eight weeks, Bernstein analyst Daniel Roeska said.
With many carriers now dependent on government help to
survive, Roeska added, "the key focus should be on emergency
liquidity support and enabling short-term layoffs or
working-hour reductions to safeguard cash."
'UNPRECEDENTED'
IAG's Walsh, who has railed against state aid to rivals
throughout his career, said airlines should continue to try
self-help first.
But he added: "Clearly where governments are providing
general support particularly for employees that are being
impacted by the current crisis, we would avail (ourselves) of
those general facilities."
Air France-KLM said it would park its entire Airbus A380 and
Boeing 747 fleets as it reduces operations by 90% and discusses
emergency aid with the French and Dutch governments.
The group will use government-funded partial layoffs to find
200 million euros ($224 million) in emergency cost cuts as it
reins in capital expenditure by a further 350 million.
Airlines are likely to postpone new jet deliveries as they
slash spending, a prospect weighing on Airbus, whose
shares were down 16.7%, and Boeing. Aircraft and engine
makers also face a slump in parts and maintenance sales as air
traffic withers.
"Demand is drying up in ways that are completely
unprecedented," aviation consultant CAPA said in a report,
predicting that most global airlines would go bust by June
without government help. "Normality is not yet on the horizon."
Germany's Tui AG and Scandinavian carrier SAS
are also suspending the vast majority of operations and
seeking government support.
Finnair predicted a substantial loss this year as
it announced the near-halt of operations and scrapped its
dividend. Icelandair also slashed capacity and said
it was in union talks to cut its wage bill.
Earlier, United Airlines said March revenue had
dropped by $1.5 billion and planes may remain near-empty into
the summer even after severe schedule cuts. "This crisis is
moving really quickly," CEO Oscar Munoz and President Scott
Kirby told employees in a Sunday memo.
Air New Zealand Ltd, which has halted trading in
its shares until Wednesday, also plans job cuts after cutting
long-haul capacity by 85%, CEO Greg Foran warned.
"For the coming months at least, Air New Zealand will be a
smaller airline requiring fewer resources, including people," he
said.
($1 = 0.8933 euros)
(Reporting by Sarah Young and Laurence Frost; Additional
reporting by Sudip Kar-Gupta and Tim Hepher in Paris, Jamie
Freed in Sydney, Tracy Rucinski in Chicago and Alexander
Cornwell in Dubai; Editing by Mark Potter)
