Airlines, airports seek fresh ways to deal with cash crunch amid crisis
By Jamie Freed SYDNEY (Reuters) - Airlines and airport operators said they are taking steps such as suspending dividends, selling and leasing back airplanes and flying cargo on empty passenger jets as they grapple with a cash crunch and plunging demand caused by the coronavirus outbreak. New Zealand's Auckland International Airport Ltd said on Tuesday it would scrap its interim dividend on top of cost-cutting measures that include a hiring freeze and a halt to discretionary spending.
By Jamie Freed
SYDNEY (Reuters) - Airlines and airport operators said they are taking steps such as suspending dividends, selling and leasing back airplanes and flying cargo on empty passenger jets as they grapple with a cash crunch and plunging demand caused by the coronavirus outbreak.
New Zealand's Auckland International Airport Ltd
In a blow to the airport operator, Air New Zealand Ltd
Qantas Airways Ltd
The Australian carrier last week told analysts it was looking to raise a few hundred million dollars by refinancing some of its aircraft.
Hong Kong's Cathay Pacific Airways Ltd <0293.HK> said on Monday it had agreed a $703.8 million (576 million pounds) deal with lesser BOC Aviation Ltd <2588.HK> to sell and lease back six Boeing Co
The carrier, one of the earliest and hardest hit by the outbreak due to its proximity to mainland China, said its full-service airlines, Cathay Pacific and Cathay Dragon, had made an unaudited loss of HK$2 billion ($257.5 million) in the month of February alone.
It will cut up to 90% of its capacity in April, up from an earlier plan of 65% announced alongside its annual results last week.
"If we do not see a relaxation of travel restrictions in the near future, we expect the same arrangement will have to continue into May," Cathay Pacific Group Chief Customer and Commercial Officer Ronald Lam said in a statement.
"Our advance passenger bookings show no clear signs of recovery at this stage, and the gap in bookings compared to 2019 continues to widen," he said.
CARGO BRIGHT SPOT
The only bright spot for the airline is the cargo market, where rates are surging as a result of the loss of capacity in the belly of passenger aircraft as those flights are cut.
Cathay Pacific and Korean Air Lines Co Ltd <003490.KS> are both flying some planes without passengers to transport cargo due to high demand.
Qantas said it would use some domestic passenger aircraft for freight-only flights to replace lost capacity from regular scheduled services and its fleet of freighters would continue to be fully utilised.
Freight Investor Services on Monday reported a surge in prices across all Asia-Pacific routes. "2020 is fast becoming year of the freighter," it told clients.
Singapore Airlines Ltd
Carriers in Europe and the Americas are struggling too.
Major U.S. airlines sought a government bailout of more than $50 billion as the White House is urgently drafting a financial assistance package in the wake of the steep falloff in U.S. travel demand sparked by the coronavirus pandemic.
A trade association warned that without action airlines could run out of money by year-end - and even sooner if credit card companies started withholding payments. Without action soon, airlines and others in the sector could furlough tens of thousands of workers.
In Europe, already battered shares in British Airways parent IAG
(Reporting by Jamie Freed; Editing by Lincoln Feast.)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
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