* Wizz Air, IATA float empty middle-seat policies
* On-board social distancing threatens business models
* Wizz Air exploring measures including passenger masks
(Adds interview with head of IATA, background)
By Sarah Young and Laurence Frost
LONDON/PARIS, April 14 (Reuters) - Wizz Air is making plans
to fly jets only two-thirds full to allow more space between
passengers, it said on Tuesday, as airlines voiced concerns that
anti-coronavirus measures could blight their profitability long
after travel restrictions end.
Wizz Air Chief Executive Jozsef Varadi and the head
of the industry's global trade association both said
single-aisle planes may be required to leave the middle seats on
each side vacant to allow a degree of "social distancing"
aboard.
"We would basically be blocking a third of the airplanes,"
Varadi told Reuters in a telephone interview. "A 180-seater
would become a 120-seater."
Beyond the open-ended lockdowns and travel bans that have
brought air travel to a near-halt, deep uncertainty remains over
the pace of an eventual recovery and the potential for lasting
restrictions that could pile up yet more losses.
Raising its coronavirus impact forecast to $314 billion, the
International Air Transport Association (IATA) described
"worrisome" signs of governments "doubling down" on
international travel restrictions even when lifting lockdowns -
citing developments in China and South Korea.
Alexandre de Juniac, the airline body's director general,
said leaving the middle seat vacant was among likely conditions
for a resumption of air travel to be discussed with governments
in a series of coordinated meetings around the world.
Operating aircraft with more seats has been a "key element
of profitability for airlines", which typically break even above
75% seat occupancy, de Juniac said.
But removing seats could ease a possible fare-cutting war as
airlines try to recoup market share coming out of the crisis.
"On the one hand ... you have airlines that are heavily in
the red and desperately need passengers to come back, which
could put pressure on prices," de Juniac told Reuters.
On the other, he added, "if we ask for distancing in the
aircraft we will have to neutralise a great number of seats and
so it means that ... you need to raise prices. So you have
contradictory trends," he said in a video interview.
The effect could be felt most by low-cost carriers, whose
business models rely on squeezing productivity out of fleets by
installing more seats, filling a higher percentage of them with
passengers and flying more trips per day than many older rivals.
BALANCE SHEETS
But stronger balance sheets and labour flexibility could
make Wizz Air, Ryanair and easyJet better able
to withstand virus-related losses than older peers Lufthansa
and Air France-KLM. Citi analysts say
Ryanair and Wizz Air may be the only major European carriers
that can avoid raising new capital or government-backed debt.
Wizz Air, a London-listed carrier based in Hungary and
focused on central and eastern Europe, said it was cutting 1,000
jobs, about one-fifth of its total workforce.
It nevertheless reiterated plans to increase capacity by 15%
annually once markets return to normal and will take delivery of
12 single-aisle Airbus jets this year and 30-40 in 2021-23.
Germany's Lufthansa, by contrast, last week predicted it
would be years before air travel returned to pre-crisis levels.
EasyJet has also said it would defer delivery of 24 Airbus
jets.
Besides the additional effects of a broader economic slump
on travel, airlines are nervous about passengers' readiness to
return to security lines, boarding lounges and plane cabins.
Wizz Air is exploring "all sorts of measures to put in
place, especially in the initial period", Varadi said -
including protective gear for passengers.
The airline may need to "make sure that people actually
travel in masks to protect themselves and protect their fellow
passengers", he said.
($1 = 0.9153 euros)
(Reporting by Sarah Young, Laurence Frost, Tim Hepher; Editing
by Jane Merriman and Mark Potter)
easyJet (EZJ)