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(Adds EU to suspend slots rule, plus graphic)
* Slew of carriers cancel flights to and from Italy
* Korean Air warns epidemic could threaten its survival
* Australia's Qantas cuts capacity, delays plane orders
* EU to suspend airport slots rule to help airlines
By Hyunjoo Jin and Jamie Freed
SEOUL/SYDNEY, March 10 (Reuters) - Airlines around the world
sank deeper into crisis on Tuesday as the worsening coronavirus
epidemic and Italy's lockdown hammered passenger numbers, forced
the cancellation of thousands of flights and led to the delaying
of plane orders.
Some carriers face calamity, with Korean Air Lines
warning the virus outbreak could threaten its
survival after it scrapped more than 80% of its international
capacity, grounding 100 of its 145 passenger aircraft.
"The situation can get worse at any time and we cannot even
predict how long it will last," Woo Kee-hong, the president of
South Korea's biggest airline, said in a memo to staff that
summed up the turmoil facing the industry.
"But if the situation continues for a longer period, we may
reach the threshold where we cannot guarantee the company's
survival."
Australia's Qantas Airways said it would also cut
its international capacity, by nearly 25% over the next six
months, and delay an order for Airbus A350 planes due
to a plunge in demand that industry chiefs estimate could hit
airlines' revenue by up to $113 billion this year.
Qantas said it could no longer provide guidance on the
financial impact of the coronavirus, which it had estimated on
Feb. 20 could hit underlying earnings (EBIT) by up to about $98
million this financial year. Its CEO and chairman will take no
salary, managers will receive no bonuses and all staff are being
encouraged to take paid or unpaid leave.
Leading U.S. airlines American and Delta
suspended their 2020 financial guidance and took drastic further
measures to combat the impact of the coronavirus.
Delta said it had seen net bookings fall by as much as 25%
to 30% and expected the situation to deteriorate further. It is
freezing hiring and offering voluntary leave options to staff.
"This clearly is not an economic event," CEO Ed Bastian told
an industry conference. "This is a fear event, probably more
akin to what we saw at 9/11."
ITALIAN LOCKDOWN
The unprecedented lockdown of the whole of Italy, which is
convulsed by Europe's worst coronavirus outbreak, has heaped
fresh disaster on global airlines.
Norwegian Air, IAG-owned British Airways,
easyJet, Wizz Air and El Al Israel Airlines
were among carriers to axe flights to and from the
country, where there have been more than 9,000 virus infections
and over 460 deaths.
Ryanair said on Tuesday it was cutting its passenger
forecast for the year ending March by three million as a direct
result of suspending almost all flights to and from its most
important market for the next month.
Aviation analyst Mark Simpson, at Goodbody, said another
major concern for the travel industry was whether the
coronavirus epidemic would worsen markedly in European holiday
hub Spain, which has reported more than 1,200 cases.
"A similar outbreak in Spain would pull IAG into the fold,
the holiday groups like TUI and DART (Jet2)," he said. "IAG
would be much more exposed due to its ownership of Vueling,
Iberia and the soon to be completed Air Europa."
Air France said it expected to make a total of
3,600 flight cancellations in March, including cutting 25% of
its European capacity.
GHOST FLIGHTS
The global airline industry has been among the sectors
hardest hit by the coronavirus outbreak. It has lost almost a
third of its value - $70 billion - this year, according to
Reuters calculations based on the 20 top listed global carriers.
The Italian cancellations added to an already difficult
financial situation at Norwegian Air, which has lost 70% of its
market value this year and scrapped its 2020 outlook.
It said on Tuesday it would cut around 3,000 flights between
mid-March and mid-June and temporarily lay off a "significant
share" of its workforce.
In an effort to give the industry some breathing space, EU
chief Ursula von der Leyen said the bloc would suspend a rule
requiring airlines to run most of their scheduled services or
else forfeit valuable airport landing slots. This will do away
with "ghost flights" where airlines fly almost empty planes
simply to keep slots, she added.
Should Korean Air fall, it would not be the first airline
engulfed by the fallout of the outbreak; Britain's Flybe
collapsed last week as bookings faltered, and a further sector
shakeout is expected, industry experts have warned.
Conglomerate HNA Group, which owns or holds stakes in a
number of Chinese carriers, including Hainan Airlines
, said it was in a "state of war" in its efforts to
tackle the financial fallout of the outbreak.
Airlines in China, where the new coronavirus originated,
have cancelled tens of thousands of flights since the start of
the outbreak, though they have started to resume them.
($1 = 1.5246 Australian dollars)
(Reporting by Hyunjoo Jin in Seoul and Jamie Freed in Sydney;
Additional reporting by Terje Solsvik in Oslo, Laurence Frost in
Paris, Tracy Rucinski in Chicago Stella, Rachit Vats in
Bengaluru, Qiu and Brenda Goh in Beijing, Angel Krasimirov,
Tova Cohen in Tel Aviv, Sarah Young, Kate Holton and Josephine
Mason in London, anmd Christian Kraemer in Berlin
Writing by Pravin Char; Editing by Mark Potter)
