Tour operator TUI today suspended most of its operations until further notice due to the coronavirus pandemic as British Airways revealed it would slash routes by 75% and EasyJet announced further cancellations.
IAG, the owner of BA, said it would reduce capacity in April and May and its outgoing boss Willie Walsh would defer his retirement, days after a senior executive warned the airline’s very survival was at stake.
EasyJet said it could ground the majority of its fleet on a rolling basis, while the three global alliances representing all major airlines demanded urgent government action to halt bankruptcies.
Unite union warned thousands of jobs are under threat without help, as pilots’ association Balpa said the aviation industry risked ‘being wiped out’ by the pandemic.
Today’s announcements led to huge falls for airline shares, with IAG down 26% and EasyJet and TUI AG slumping 29% and 35% respectively. The wider FTSE dropped 8% to its lowest level since October 2011, adding to a 17% drop last week.
It came as the UK death toll increased by 14 overnight, bringing the total to 35, as the government prepared to introduce emergency measures including a £1,000 fine or jail for anyone refusing to self-isolate.
Millions of workers began working from home today, leaving Tubes, trains and roads empty, as Health Secretary Matt Hancock warned that over-70s could be told to stay home for up to four months within the ‘coming weeks’.
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German operator Tui today announced it would be slashing three-quarters of its routes
IAG, the owner of BA, said it would cut its flying capacity by at least three-quarters in April and May
In a message to its 70,000 employees worldwide, TUI announced it was suspending the ‘majority’ of its global operations, including package travel, cruises and hotels.
‘We are taking substantial cost measures to mitigate the earnings effect,’ its statement read. ‘Moreover, we have decided to apply for state aid guarantees to support the business until normal operations are resumed.’
Airlines have been hammed by the collapse in demand caused by the virus as people avoid travelling either voluntarily or due to mandatory containment measures.
Transatlantic carriers are also suffering from the effects of Donald Trump’s travel ban for flights between the US and Europe, which was recently extended to include the UK and Ireland.
Unions are warning of huge job losses across the industry, prompting Unite to ask the government to take a financial stake in airlines and airports to ensure their survival.
Meanwhile, the three global airline alliances, oneworld®, SkyTeam and Star Alliance, jointly called on governments to take urgent measures to help the aviation industry.
The alliances, which represent almost 60 major including BA, American, Singapore, Qantas, called for taxes and landing fees to be reduced and regulations about which companies can take slots at airports to be relaxed.
Transport Secretary Grant Shapps today refused to rule out any options, as he said there are ‘lots of different options’ to help the aviation industry through the coronavirus crisis.
He told Sky News: ‘We want to make sure that companies and individuals and organisations who are in a good state – not those that are going to fail anyway – are able to continue.
‘So, we’ll be looking at all of these measures, I’ll be discussing it with the Chancellor and the Prime Minister later today, and those discussions with the sector are ongoing.’
Asked if a bailout of airlines was on the table, Mr Shapps said: ‘There are lots of different options here – including some other things that people have been looking for, for example HMRC offer a ‘time to pay’.’
EasyJet blamed the ‘unprecedented level’ of travel restrictions imposed by governments and ‘significantly reduced levels of customer demand’ for its decision to cut flight operations.
The Luton-based carrier said in a statement there is ‘no guarantee’ European airlines ‘will survive what could be a long-term travel freeze and the risks of a slow recovery’.
The airline went on to say it is taking ‘every action to remove cost and non-critical expenditure from the business at every level’, adding that grounding aircraft ‘will remove significant levels of variable costs’.
The economic cost of the virus has reached such a level that even large established carriers are under threat, according to Nigel Frith, a senior market analyst at asktraders.com.
‘As the number of countries shutting down borders and the list of destinations suspending flights grows the aviation industry is facing an unprecedented challenge,’ he said.
‘Staff are starting to be laid off as airlines struggle to rein in costs quickly in an attempt to weather the biggest crisis to hit the industry, worse than 9/11. This is no longer just the smaller players like Flybe who are being affected.
‘Industry big shots such as British Airways is even warning over its survival. It wouldn’t be surprising if governments are forced to step in to prop up some airlines.’
EasyJet said it could ground the majority of its fleet on a rolling basis, and its chief executive Johan Lundgren called for coordinated government backing
The FTSE 100 index is shown falling this morning (far right) and last Friday (rest of the graph)
Both EasyJet and BA today insisted they had strong balance sheets, providing details on their cash positions and credit facilities.
IAG, which also owns Iberia and Aer Lingus, said it had total liquidity of 9.3 billion euros, while EasyJet said it had £1.6billion of cash plus an undrawn £405m revolving credit facility.
While IAG’s Walsh has long-opposed any government help for aviation businesses, and said as recently as two weeks ago that government’s should not prop up airlines, EasyJet’s Johan Lundgren called for help.
‘European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over,’ Mr Lundgren said today.
Meanwhile, Mr Walsh said: ‘We have seen a substantial decline in bookings across our airlines and global network over the past few weeks and we expect demand to remain weak until well into the summer.
‘We are therefore making significant reductions to our flying schedules.
‘We will continue to monitor demand levels and we have the flexibility to make further cuts if necessary. We are also taking actions to reduce operating expenses and improve cash flow at each of our airlines.
‘IAG is resilient with a strong balance sheet and substantial cash liquidity.’
Chief Executive Alex Cruz wrote to all 45,000 workers saying the virus’ relentless spread is a crisis ‘of global proportions like no other we have known’, more serious than the 2008 financial crash, SARS or 9/11.
Mr Cruz warned people would be put out of work and planes would be grounded ‘like we’ve never had to do before’ and urged: ‘Please do not underestimate the seriousness of this for our company’ in a message entitled ‘the survival of British Airways’.
As part of cash-saving measures, IAG will also be cutting spending on IT, freezing recruitment, encouraging staff to take leave and reducing working hours. Today, Air France said it will slash flight capacity by 70-90 percent over the next two months.
The Scandinavian airline SAS said on Sunday that it would temporarily halt most of its traffic starting today, leading to up to 10,000 employees being laid off.
American Airlines it suspending almost all long-haul international flights from Monday, while last week Norwegian Air said it would lay off around half of its 11,000 staff and cancel 4,000 flights as it struggled to stay afloat.
Have you had to cancel your holidays due to the coronavirus outbreak? Contact [email protected] or phone 020 3615 2874
An empty terminal at Gatwick Airport yesterday, as airlines were hammered by a catastrophic drop in demand
Millions of British workers stayed at home today amid the outbreak. Pictured: A sparsely-filled District Line carriage on an Underground train in west London
A man wears a ventilator mask and rubber gloves as he waits for a friend at Euston Station in London. Others are seen on their phones and waiting outside the station
Hell for Britons in Europe: Thousands of tourists and expats are stranded in Spain after country entered two-week lockdown – while 30,000 more are stuck in France as French ski resorts close
By Tom Payne, Transport Correspondent for the Daily Mail and Natalia Penza in Spain for MailOnline
Hundreds of thousands of British tourists and expats are stranded in Spain today after the country entered an unprecedented two-week lockdown.
Panicked holidaymakers were last night scrambling to escape after the Spanish government declared a state of emergency over coronavirus.
The drastic action came as the country’s death toll from the outbreak more than doubled overnight to 288 yesterday and the number of infections soared by a third to 7,753.
It comes after 30,000 UK tourists are thought to be stuck in France after ski resorts closed at midnight on Saturday.
Holiday company Neilson called on the government to step in with emergency measures, after widespread confusion across the Alps, as reported by The Guardian.
Last night, city streets and beaches fell eerily silent as Spain’s 47million citizens hunkered down in their homes and tourists were forced to stay in their hotels.
Thousands of British tourists have been left trying to escape Spain today after the Spanish government declared a state of emergency over coronavirus. Pictured: Brits Denis Couzens and wife Margaret who are on lockdown in a caravan site near the Costa del Sol resort of Estepona
It comes after the Spanish government declared the country would be entering an unprecedented two-week lockdown. (Stock image)
Pictured: A police officer halts tourists in Las Ramblas, Barcelona, Spain, as the government declares a state of emergency
On the Costa del Sol, home to 50,000 British expats, police in face masks and latex gloves patrolled beaches with megaphones, warning of prison time and on-the-spot fines of up to £25,000 for anyone caught breaching the lockdown.
Retired British fireman Denis Couzens and his wife Margaret are staying on a caravan site near the Costa del Sol resort of Estepona.
They arrived on January 8 after driving through France from their home in Kent, and had been due to stay until April 1 – but now face an anxious two-weeks under lockdown.
Mr Couzens, 70, said: ‘I take medication for a lung disease called chronic obstructive pulmonary disease which could be linked to my years as a firefighter so I’m in the risk category… we’re probably not going to take the risk of leaving to try to get home if things are still so volatile.
‘There’s a good 150 holidaymakers on the site at the moment and around 70 per cent of them are British. Most are in their sixties and seventies.’
In Madrid, shoppers kept a distance from each other as they formed an orderly queue outside a supermarket.
A security guard in a face mask let them in two by two. Children’s playgrounds in the Spanish capital were cordoned off with police tape, and in Benidorm, baton-wielding police officers ordered British revellers back to their hotels.
The emergency measures mean all shops, restaurants, bars and cafes have been closed, but supermarkets and pharmacies are open for essential visits only.
Spain is the UK’s most popular holiday destination and welcomes 20million Britons a year. It is also home to 300,000 British expats, many of them elderly.
Pictured: British tourist Julia Spencer, 52, from Saddleworth, Manchester, is a Jet2 holidaymaker stuck in Tenerife until Tuesday
Panic spread through resorts over the weekend as airlines including EasyJet, TUI, Jet2 and Ryanair cancelled flights to and from the mainland, the Balearics and the Canary Islands.
Airlines such as Jet2 are flying empty planes to Spain over the next few days to repatriate holidaymakers on a handful of ‘rescue flights’.
EasyJet has warned seats for its rescue flights will be sold on a ‘first-come-first-served’ basis.
Julia Spencer, 52, from Saddleworth, near Manchester, flew Jet2 on Friday for an all-inclusive four-day holiday on Tenerife’s five-star Sandos San Blas Nature Resort.
Mrs Spencer, who is holidaying with a friend, said: ‘There are hundreds of British tourists here and most of us are really panicked.
‘We have no idea what’s going on. The hotel reception say that once the lockdown comes into force, we won’t be able to leave the hotel for any reason other than to visit a pharmacy. But we’ve had nothing official from anyone.
Pictured: A tourist is stopped in Las Ramblas on March 15, as the Spanish government steps up its quarantine rules
‘There are lots of scary rumours going round. One of the bar staff said we could get a 500 euro fine if we leave the hotel. We are in a fortunate position because our holiday is all-inclusive and we’ve been told our flight home on Tuesday is going ahead as planned.’
In the same hotel is Mike Vidler, 69, of West Sussex. He said: ‘I am pretty sure that if I got coronavirus, I would find it very difficult. I have had MS for 41 years and I have type 2 diabetes.
‘There are a lot of people worried here but we’re just carrying on with our holidays as normal and trying not to panic too much.’
The Foreign Office, which is advising against ‘all but essential’ travel to Spain, is urging holidaymakers to follow the advice of local police.
Europe shuts borders – Now Germany seals itself off as draconian curbs sweep the continent
Europe entered a dramatic phase of coronavirus lockdown yesterday as sweeping restrictions on travel and socialising were introduced.
Germany announced that both its southern and northern land borders would close from today, while France said it would limit transport within the country – including trains – for the first time.
Chancellor Angela Merkel approved border closures with France, Austria, Switzerland, Luxembourg and Denmark from 8am this morning.
Countries across the continent are leaping into action to stop the spread of coronavirus, with many closing their borders or restricting entry
Thomas Strobl, interior minister of the state of Baden-Württemberg, said: ‘The spread of the virus has to be slowed. The basic rule should be – anyone who doesn’t urgently need to cross the border should not cross the border.’
The rules will not apply to cargo or cross-border commuters.
For traffic going the other way, France said it would implement tougher checks on people and goods at its frontier with Germany, but insisted this did not represent a border closure.
An interior ministry source said: ‘We are going to limit border crossings to the strict minimum, while allowing people and merchandise to go through. It’s not a closure.’ As France recorded 29 coronavirus deaths yesterday – its highest daily total so far – minister Elisabeth Borne said the government would limit long-distance travel ‘to the strictly necessary’.
Long-distance train traffic will be halved, with only a few international flights maintained, she said, with terminals at Orly and Charles De Gaulle airports closed by the end of this week.
Last night, Portugal’s prime minister António Costa said he was closing the border with Spain to tourism today, adding: ‘There is a tradition of Spaniards visiting during the Easter holidays. This year is not ideal for that visit.’
In the rest of the EU, Cyprus, Denmark, Poland, the Czech Republic, Slovakia, Estonia and Lithuania all closed their borders to passenger traffic.
Italy recorded 368 fatalities yesterday, bringing its death toll to more than 1,800. It also reported 3,600 new cases, pushing the total to nearly 25,000.
The total number of deaths in Europe passed 2,000.
Austrian Chancellor Sebastian Kurz said citizens should only leave home ‘alone or with the people who live in their apartment’, as he banned gatherings of more than five people.
Spain and Italy have already introduced sweeping social measures, effectively restricting their 106million citizens to their homes except for essential trips to buy food or medicine.
At the weekend, even Berlin began to scale back its famous nightlife. Police began shutting down bars, pubs and clubs across the city on Saturday night, with the city state’s health senator Dilek Kalayci saying: ‘This is simply not the time for parties. Of 263 confirmed cases in Berlin, 42 can be traced back to nightclubs.’
The government in the Netherlands shut down cannabis cafes and sex clubs, as well as all schools, saunas, sports clubs, bars and restaurants. Ministers said they would be shut for three weeks.
Meanwhile, in the United States, there was chaos at the border as thousands of travellers queued up to be tested for the virus.
The Foreign and Commonwealth Office (FCO) told Britons not to travel to America after President Donald Trump extended a travel ban to include the UK.
The FCO advised against all but essential travel to the US ‘due to restrictions put in place by the US government’.
President Trump tweeted to travellers yesterday: ‘Pardon the interruptions and delays, we are moving as quickly as possible, but it is very important that we be vigilant and careful. We must get it right. Safety first!’
Hoboken in New Jersey became the first city in the US to introduce restrictions on socialising. The city imposed a 10pm to 5am curfew on its 55,000 residents.
Australia, meanwhile, said it would quarantine all international passengers for 14 days.
In Jerusalem, the Al-Aqsa mosque, Islam’s third holiest site, was closed indefinitely.