Norwegian og likviditetskrisen deres - ATW

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Wizz Air & Ryanair lead Europe on liquidity for COVID-19

In a statement to the stock market on 16-Mar-2020 easyJet neatly summarised the current, unprecedented, challenge facing European Airlines:

"European aviation faces a precarious future and there is no guarantee that the European airlines, along with all the benefits it brings for people, the economy and business, will survive what could be a long-term travel freeze and the risks of a slow recovery. Whether it does or not will depend significantly on European airlines maintaining access to liquidity, including that enabled by governments across Europe."

A number of European governments have indicated that they are prepared to support the airline industry in the light of the COVID-19 pandemic and the consequent near total collapse of demand resulting from travel restrictions.

This report presents CAPA's analysis of the liquidity balances of leading European airline groups, with Wizz Air and Ryanair leading and Norwegian trailing.

It also gives a review of recent actions taken to cut capacity and expenditure by those groups. It comes with the caveat that, as with the spread of the virus, the situation is changing rapidly and its content may be quickly superseded.

Summary

• Flight restrictions have been imposed in many countries. The EU is considering a ban on travel to 31 countries by non-EU nationals.
• Wizz Air and Ryanair have the best liquidity among European airline groups, while Norwegian has the lowest.
• Leading European airline groups are cutting capacity by 75% to 90%. Austrian Airlines is suspending all flights.
• Some European governments, including those of France, Netherlands, Norway, Finland and Italy, have indicated they are willing to support airlines in the crisis. Late on 17-Mar-2020, the UK government said it would consider support to airlines.

Flight restrictions in many countries

Several European countries have now imposed flight restrictions, including total bans on international flights in Poland and Norway and a ban on non-nationals entering the Czech Republic.

In addition, the US has extended the ban on non-nationals from Europe's Schengen zone to include the UK and Ireland, and other nations outside Europe have imposed restrictions on inward travel, including Argentina, Chile, India and Peru.

On 16-Mar-2020 it emerged that the European Union is planning a temporary (30 day) ban on non-essential travel to 31 European countries by non-EU citizens and residents. UK citizens would not be covered by the ban, which needs approval from EU national leaders.

Furthermore, even where travel restrictions are not in place, social distancing measures (whether or not they are government-imposed) will further cut demand for air travel.