Competing global airline alliances join voices calling for governments to take action to alleviate challenges faced by global airlines

• March 17, 2020
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The three leading global airline alliances – Star Alliance, oneworld and Skyteam, which represent almost 60 airlines around the world that contribute more than half of global airline capacity, are strongly supporting a request by the International Air Transport Association 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.

The impact of COVID-19 on the airline industry is significant, with IATA estimating up to US$ 113 billion in revenue losses for global passenger airlines. 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.

To alleviate the immense pressures faced by airlines in the current operating environment, and in support of IATA’s statement on 12 March, the three alliances urge 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 during this unprecedented period.

Centre of aviation (CAPA) announced that most airlines will be bankrupt by May if governments fail to cooperate and that national self-interest over cooperation is a threat for aviation.

The alliances also call on other stakeholders like airport operators who 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 US airline industry is seeking $50 billion in federal assistance as the current environment is just not sustainable with no end in sight.

oneworld CEO Rob Gurney said: “During such times of difficulty and uncertainty, it is important that the airline industry works even closer with stakeholders to mitigate adverse impacts from the virus and collaborate in areas within our control. Governments must implement the measures they consider necessary to contain the spread of COVID-19, and must be prepared for the wide scale economic implications that will result from those measures.”

SkyTeam CEO and Managing Director Kristin Colvile said: “The human and financial impact that the COVID-19 outbreak is having on the aviation industry is unprecedented. SkyTeam, with its alliance partners, and on behalf of member airlines, is urging all involved institutions and industry stakeholders to face these extraordinary times with exceptional measures. This includes action such as slot relief, airport and overflight fees reduction.

Star Alliance CEO Jeffrey Goh said: “The unprecedented circumstances triggered by the coronavirus outbreak pose an existential threat not only to the airline industry but more generally to global trade and commerce, and social connectivity. As airlines stretch their limits to manage the crisis, it is equally critical for governments and stakeholders to avoid further burdens and step up with measures, as some have, that will ensure the future of the travel 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.
While they are responding proactively to mitigate further impact in face of rapidly-changing policy scenarios, it is imperative they are supported by governments and stakeholders who can play a vital role in alleviating the unprecedented pressures faced by global airlines amid these extremely challenging times.