The worst is still to come for the airline industry in terms of economic damage from the coronavirus outbreak, European bosses warned on Tuesday, but they predicted that travel demand could stabilize in the coming weeks.
Coronavirus has hit travel demand, forcing airlines to cancel flights and cut costs, and ask governments and regulators for help, as they battle to get to grips with what they hope will be short-term, rather than long-term, disruption.
The heads of Europe’s biggest carriers including Ryanair’s Michael O’Leary; Willie Walsh, boss of British Airways-owner IAG; and easyJet’s Johan Lundgren said at an annual industry conference the epidemic was upsetting growth.
“We have seen a drop in demand when you look particularly in the northern part of Italy, but that has also spilled over to the other parts of the network,” easyJet CEO Johan Lundgren said on the sidelines of a conference.
Italy has seen the biggest outbreak of the illness in Europe.
IAG’s Walsh also noted a “very significant fall-off in demand” in Italian markets in the past week. But he predicted demand would stabilize in coming weeks if bookings followed the pattern seen in Asia.
“I think we will see air traffic recover in due course,” he said.
Ryanair’s O’Leary agreed the next few weeks would be tough. He said he expected a “very deflated booking environment” for the next two to three weeks, but should the crisis stabilize, bookings would recover.
“I think you will see a pretty rapid return to normal,” he said.
Yet the bosses acknowledged it could get a lot worse before it gets better.
“If we’re not successful in the containment of it then there might be a more difficult outcome,” Lundgren said.
Airlines worldwide have been suspending flights or modifying services in response to the coronavirus outbreak, which has now claimed more than 3,000 lives and infected more than 90,000 people globally, after spreading from China to 77 other countries and territories.
The crisis has led to a quarter of the short-haul fleet of airlines like Lufthansa being grounded.
As part of the European airline lobby group A4E, the airlines called for a relaxation of airport regulations to help them cope with the impact of coronavirus.
That followed a call from global industry body IATA on Monday for a suspension of rules under which airlines can lose lucrative landing and takeoff slots if they cancel flights for a prolonged period.
“We request that a temporary waiver be granted by all (EU) member states,” Air France-KLM CEO Ben Smith said ahead of the annual conference of the Brussels-based A4E.
Airlines also want a “common set of health requirements for travel to and from the affected regions”, Smith added.
IAG’s Walsh said struggling airlines should not be given state aid to enable them to survive the drop-off in demand. But there was a feeling governments could take other action to help all airlines navigate this difficult period.
“I do think it is absolutely the right thing to do to ask governments to consider what type of support they can give their airlines in terms of maintaining connectivity,” Lundgren said.
Smith said that what set this crisis apart from SARS crisis in 2003 was the role played by social media.
“What’s definitely different with this crisis (is) the type of media attention it’s getting. Social media has had a different impact on the trust and the understanding of people who fly,” he said.
Ryanair’s O’Leary said social media wasn’t helping but he was confident its impact was short-lived.
“There’s a lot of misinformation out there. Social media is a scourge for idiots but common sense usually wins out in a reasonably short period of time,” he said.