Covid-19: Airline Alliances Expect ‘Ripple Effect’ in Industry

The three global airline alliances oneworld, SkyTeam and Star Alliance, are jointly calling on governments and stakeholders to take action to alleviate the unprecedented challenges faced by the global airline industry amid the coronavirus (COVID-19) pandemic.

In a joint statement, the three airline alliances stress that the impact of COVID-19 on the airline industry is significant, with the International Air Transport Association (IATA) estimating up to US$ 113 billion in revenue losses for global passenger airlines.

According to the alliances, the impact is expected to have a ripple effect through the value chain that supports the airline industry.

“The forecasted revenue loss scenario does not include travel restrictions recently imposed by the US and other governments. US restrictions on passengers from the Schengen Area will place pressure on the US-Schengen market, valued at over US$ 20 billion in 2019,” the statement reads.

To alleviate the immense pressures faced by airlines in the current operating environment, and in support of IATA’s requests, the three alliances are urging governments worldwide to prepare for the broad economic effects from actions taken by states to contain the spread of COVID-19, and to evaluate all possible means to assist the airline industry.

The alliances also call on other stakeholders to provide support. For example, airport operators are urged to evaluate landing charges and fees to mitigate the financial pressure faced by airlines due to a severe decline in passenger demand.

The three global alliances, which represent almost 60 airlines around the world that contribute more than half of global airline capacity, are strongly supporting a request by IATA for regulators to suspend slot usage rules for the northern summer 2020 season as the airline industry suffers from extraordinary reductions in passenger demand.

The alliances welcome the moves in recent days by some regulators who have suspended slot regulations temporarily and urge others to follow suit promptly. They also request that regulators consider extending the suspensions for the entire operating season.

On March 10, the European Commission said it was looking to suspend airport slot EU regulations for airlines, due to the major impact the coronavirus outbreak is having on the aviation industry.

Member airlines of the three global alliances have implemented urgent measures to address the impact of COVID-19, such as very significant capacity reductions, cost-saving initiatives, enhanced cleaning procedures and customer support outreach.