Coronavirus: Airlines ground 85% of fleets, put staff on unpaid leave as shares fall amid travel restrictions
Virgin Atlantic, British Airways, Ryanair, EasyJet, and other major airlines around the world are suspending operations and grounding its fleets as business is hit by the coronavirus pandemic that has seen governments across the world impose travel restrictions.
Virgin Atlantic, 51% of which is owned by billionaire and philanthropist Richard Branson, will be grounding 75% of its fleet by March, and up to 85% by April, according to the Daily Mail.
Its staff will be asked to take up to eight weeks of unpaid leave over the next three months to cut costs and avoid job losses, in a move that has been criticized by shadow education secretary of the UK Angela Rayner.
"Richard flog your private island and pay your staff, we are in unprecedented times here," Rayner tweeted. "Now is the time your staff need support after making mountains of cash for the company."
But Virgin Atlantic is not alone in implementing such a drastic strategy. IAG, which owns British Airlines, has similarly said it will be reducing its capacity in April and May, while EasyJet announced it could ground the majority of its fleet on a rolling basis.
RyanAir, too, has said it could do the same across Europe over the next week amid plans to cut seat capacity by as much as 80 percent for the next two months but did not rule out the possibility of grounding its entire fleet altogether either.
The announcements saw airline shares take a massive hit, with IAG down 26 percent, EasyJet down 29 percent, and TUI AG down 35 percent. The wider FTSE dropped 8 percent, adding to the 17 percent drop last week, to its lowest level since October 2011. Unions have warned thousands of jobs could be lost in the downturn.
The three major global airline alliances, Oneworld, SkyTeam and Star Alliance -- which represent close to 60 major airlines, including Qantas and BA -- jointly called on governments to take urgent measures to help the aviation industry.
UK Transport Secretary Grant Shapps has left the door open to a multi-billion pound bailout to keep the aviation industry afloat and said "there are lots of different options" on the table.
"We want to make sure that companies and individuals and organizations who are in a good state - not those that are going to fail anyway - are able to continue," he said. "So, we'll be looking at all of these measures, I'll be discussing it with the Chancellor and the Prime Minister later today, and those discussions with the sector are ongoing."
"There are lots of different options here - including some other things that people have been looking for, for example, HMRC offer a 'time to pay,'" he added.