As COVID-19 is wreaking havoc in the travel industry, many airlines will not survive. Just a few days ago, rumors were flying around that Greece’s Aegean Airlines may soon be nationalized. Meanwhile, the government’s bailout plan for Thai Airways fuels outrages, not just from the public, but also from the airline’s union.
Let’s take a look at six airlines — that we Thais often fly and are quite familiar with — to see how they are coping with the unfriendly sky.
Qatar Airways (QR)
The Doha-based airline announced last Wednesday that it’s going to lay off a substantial amount of staff. Its CEO, Akbar Al Baker, wrote internally that affected employees will be paid their contractual dues. As well, those staff who are unable to return home due to travel restrictions would be provided with living allowance and accommodation until a return was possible.
The airline has been flying consistently over the past few months to many key destinations, including Bangkok. It prided itself as the airline that will bring people from around the world home during this crisis.
Qatar Airways plans to resume flying to half of its network by the end of June.
Singapore Airlines (SQ)
Just like Thai Airways, SQ is majority government-owned, through Temasek Holdings, one of Singapore’s two sovereign wealth funds. But unlike the Thai government, the Singaporean government does not intervene in the running of the airline and no generals sit on its board of directors.
Given how SQ has been successfully run, the government could recline back and enjoy dividend payment from the airline.
On Thursday, the airline shares surged the highest in more than three decades, owing to speculation that SQ will bounce back after economies around the world reopen and that it has secured additional funding through convertible bonds and a new bridging loan.
ANA All Nippon Airways (NH)
ANA Holdings, NH’s parent company, announced that it will suspend all recruiting activities up until March 2022. After asking the Japanese government to guarantee its loan in early April, it has since secured a total of 288 billion baht in loans and credit lines with local financial institutions.
Soon, more than 90% of its staff will receive three to five partially paid leave days per month, as part of the cost-cutting plan. Since mid-April, ANA has cut up to 90% of its international capacity. But for domestic flights, it is the will of the Japanese government to encourage transport infrastructure to remain operational.
The airline continues to fly domestically, even with less than 10 passengers on a flight.
Cathay Pacific Airways (CX)
Things have been pretty grim for CX ever since the Hong Kong protest. It was among the first airlines to suffer from the Covid-19 crisis, given its connectivity with Mainland Chinese destinations. So don’t expect for recovery to come any sooner than any other global airline around the world.
CX benefited from the Hong Kong government’s unique (and fair) approach to airline bailouts, as the government chose to subsidize all locally registered airlines on a “per aircraft” basis.
The one-off help is 4.2 million baht for each large aircraft and 840,000 baht for each small aircraft. It also received an additional 10.8 billion baht worth of advanced ticket payment from the HK Airport Authority to make up for the loss of passenger revenue.
So far, the airline has laid off almost 300 US-based staff and furloughed nearly 200 pilots, mostly based in Australia and Britain. Flight attendants based in Hong Kong, Singapore, Bangkok and London remain employed by the airline.
The Dubai-based state-owned airline has announced that “as a result of current reality,” it has plans to lay off many staff. The announcement came after having previously asked its workforce to take unpaid leave where possible in March.
Emirates is currently reaching out to local and international banks for funding, in addition to an undisclosed financial aid already provided from the state of Dubai. Emirates President Sir Tim Clark said that demand won’t likely return until 2023.
Covid19 pandemic may also mark the end of two of the industry’s largest aircrafts, as Clark put it: “We know the A380 is over, the 747 is over, but the A350 and the 787 will always have [their] place.”
The superjumbo jet A380 forms the backbone of Emirates, as the airline is currently flying 115 of them, with eight more due to enter service. Reduced travel demand may force the airline to retire these superjumbos earlier than expected, as the airline will face difficulty filling up the 615 seats on this aircraft type.
Thai Airways (TG)
The airline will receive a government loan guarantee worth 50 billion baht. Prime Minister General Prayut Chan-o-cha announced that this will be the airline’s “last chance” to turn itself into a profitable business.
Although not officially announced, it has been reported that the airline’s rehabilitation proposal will include breaking it up to five separate companies and changing its status to a non-state controlled state enterprise, much like Singapore Airlines.
Earlier on Friday, TG Union representative lodged a letter to the Prime Minister’s Office that welcomed the government’s help and would cooperate with the downsizing plan.
However, the union objects to the plan to declassify the airline as a state-controlled (state ownership smaller than 50% of total shares) enterprise. It also disagrees with the idea to break the company into five businesses, because — as the union said — “TG is One and is Thailand’s national airline.”
One has to wonder, how would the TG Union react if the plan goes ahead. A strike, perhaps?
The airline plans to resume operations on a limited basis, June 1.