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March 16, 2020 Several European airlines have decided to take draconian measures to reduce their activity in the face of falling demand for coronaviruses and have called for urgent action to avoid the collapse of the sector.

Their performance on the European markets at the opening on Monday was a real war bulletin: all travel-related securities collapsed, from Tui (-34.2%) to International Airlines, (-23.5%), from Ryanair (-19%) to EasyJet (-16%), from Air France (-16.2%) to Lufthansa (-9.7%). -

IAG
The International Airlines Group, which owns among other British Airways, Iberia and Vueling, announced a reduction of its capacity "of at least 75%" in April and May compared to 2019 due to the pandemic, which led many countries to restrict travel and passengers to cancel holidays.

In the first quarter of the year, IAG's transportation capacity was reduced by 7.5% on an annual basis. The company claims to have "solid liquidity" but cannot make profit predictions for 2020 "due to the uncertainty of the potential impact and duration of the covid-19".

Air France-Klm
The group formed by Air France and the Dutch company Klm has also announced that in the next two months it will reduce its offer by between 70% and 90% by continuing "to monitor the evolution of the daily context to make changes if necessary". The stock lost over 17% when the Paris stock exchange opened.

The French airline will leave "the entire Airbus 380 fleet" and the Dutch "the entire Boeing 747 fleet" ashore. The drop in activity will only be compensated "for about 50% by the reduction in variable costs".

Losses of $ 113 billion
Meanwhile, the International Air Transport Association, IATA, has estimated that airlines could lose up to $ 113 billion in revenue by 2020 due to the impact of the pandemic.

The impact on low-cost airlines
The British airline Easyjet has announced that it has "established new flight cancellations" which could be translated in the short term with "the maintenance of most of the fleet on the ground".

"It is not certain that European companies will survive what could lead to a long-term freeze on travel," insisted Easyjet, urging public authorities to take urgent measures to help the industry.

According to British newspapers The Guardian and Financial Times, the president of the board of directors of Virgin Atlantic had plans to send a letter to Prime Minister Boris Johnson asking for a bailout between 5 and 7.5 billion pounds (5.5 -8.23 billion euros).

The low-cost airline Norwegian Air Shuttle has also announced that it is canceling 85% of its flights. It also announced that nine out of ten employees will be laid off for a limited period of time. About 7,300 jobs are affected.

Layoffs in sight
To preserve their liquidity, both British Airways and Klm have already announced that they will have to cut thousands of jobs. "The aviation industry is facing an unprecedented challenge," said Norwegian CEO Jacob Schram. His concerns are the same as for major airlines.