Extension of U.S. Travel Ban Piles More Pain on Airlines

 - March 16, 2020, 8:04 AM
British Airways is one of several carriers announcing significant capacity cuts in response to the U.S. travel ban on 28 European countries. (Photo: British Airways)

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.

Airlines today scrambled to implement drastic cuts to transatlantic service in response to the Trump Administration’s March 14 decision to add the UK and Ireland to a list of 26 European countries whose cities are now banned from entering the U.S. The policy change, announced during a White House press conference less than 12 hours after the initial ban took effect, comes into force at midnight U.S. Eastern Time on March 16.

In the UK, the worsening crisis has prompted demands for government action to alleviate the extreme financial hardship now facing carriers. Virgin Atlantic founder Sir Richard Branson demanded emergency funding of almost $10 billion to avoid further airline bankruptcies. The Airlines UK group angrily accused Prime Minister Boris Johnson’s administration of inaction and complacency in failing to respond to the collapse of FlyBe earlier in March.

Though U.S. citizens and permanent residents can still enter the country, they must do so via 13 designated airports, where additional health checks were being conducted. Over the weekend arriving passengers experienced wait times of up to 10 hours to complete the process, during which they had to stand in very close proximity.

The immediate dilemma for airlines operating transatlantic routes is what, if any, service they can support given that 528 million potential customers are now effectively barred from flying to the U.S. It seems highly likely that U.S. travelers will curtail trips to Europe, which would leave only non-European passengers transiting through European airports en route to the U.S.

On March 16, IAG, parent company of British Airways, Aer Lingus and Iberia, announced it will cut capacity by an unprecedented 75 percent for April and May. United Airlines said it is cutting its schedule by 50 percent for the next two months and American Airlines plans to reduce its schedule by 75 percent through May 6. Delta also significantly scaled back its international service and now operates only five daily transatlantic services from Atlanta to Amsterdam, London, and Paris, from New York to London and from Detroit to Amsterdam.

Just about all European airlines, including leading groups Lufthansa and Air France-KLM, have announced dramatic cutbacks while warning of significant effects on their balance sheets. Lufthansa is curring long-haul capacity by 90 percent and short-haul by 80 percent. Low-cost operators EasyJet and Ryanair announced service reductions, and EasyJet indicated that the cuts might result in the grounding of the majority of its fleet.

Scandinavian group SAS announced it will lay off 10,000 employees, representing 90 percent of its entire workforce. It intends to stop almost its entire flight schedule. Last week, Norwegian Airlines announced it will cancel around 4,000 flights and lay off half of its payroll. Virgin Atlantic is to ground nearly 85 percent of its fleet and has asked staff to take eight weeks of unpaid leave. 

In a statement issued soon after the U.S. extended its travel ban to the UK and Ireland, Airlines UK demanded urgent action, accusing the UK government of “prevarication” and “bean counting.” It expressed bitter disappointment that last week’s UK budget announcement did not include changes to airline passenger duty, as proposed in January when FlyBe first came close to collapse.

“We’re talking about the future of UK aviation—one of our world-class industries—and unless the government pulls itself together who knows what will be left of it once we get out of this mess,” it said.

UK transport secretary Grant Shapps said that the government will consider relief measures such as deferring tax payments. “We want to make sure that companies and organizations who are in a good state, not those who were going to fail anyway, are able to continue,” he told reporters. “We’ll be looking at these measures, and I’ll be discussing them with the chancellor and the prime minister.”