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Jetstar Asia to suspend all services for three weeks

US aviation firms are seeking billions in assistance; cargo market is the only bright spot for many carriers now

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Qantas said its cutbacks would continue until at least the end of May. They affect both Qantas flights and those of Jetstar and will impact the company's entire 30,000 staff.

Sydney

BUDGET airline Jetstar Asia said on Tuesday it would suspend all services for three weeks from March 23 to April 15, amid travel and border restrictions imposed by countries worldwide to curb the spread of the coronavirus. Airlines around the world have made drastic cuts to their flying schedules, shed jobs and sought government aid after the new restrictions.

Jetstar Asia is a low-cost airline based in Singapore. It is Singapore-owned but part of Australia's Qantas which said on Tuesday it would cut its international capacity by around 90 per cent until at least the end of May. It would also slash domestic flights by 60 per cent.

Facing a growing list of travel bans around the globe and a "precipitous decline in demand", Qantas said the cutbacks would continue until at least the end of May. They affect both Qantas flights and those of Jetstar and will impact the company's entire 30,000 staff. "This represents the grounding of around 150 aircraft, including almost all of the group's wide-body fleet," the airline informed.

It added that travellers forced to cancel bookings would be issued with credit vouchers, but not refunds.

Qantas had already cut its international flights by around 25 per cent last week. Since then, Australia, the United States and numerous other countries have imposed strict restrictions and bans on international visitors in a bid to slow the spread of coronavirus.

Market analysts believe many airlines could go out of business due to the crisis. "By the end of May 2020, most airlines in the world will be bankrupt," market intelligence firm CAPA said in a stark warning on Monday.

The move by Qantas comes as Boeing and other US aviation companies angle for billions in assistance, airlines and airport operators globally are suspending dividends, selling airplanes and flying cargo on passenger jets amid plunging demand caused by the pandemic.

Boeing Co confirmed it is in talks with senior White House officials and congressional leaders about short-term assistance for the entire US aviation sector, including suppliers, airlines and airports.

US airlines and cargo carriers have said they are seeking at least US$58 billion in loans and grants along with additional tax changes, while airports have sought US$10 billion.

European airlines have also stepped up calls for emergency government aid. Airbus SE said it would pause production and assembly at its French and Spanish sites for the next four days to put in place strict health and safety provisions.

New Zealand's Auckland International Airport Ltd said it would scrap its interim dividend on top of cost-cutting measures that include a hiring freeze and a halt to discretionary spending. Air New Zealand Ltd announced on Monday it would cut capacity to Australia by 80 per cent from March 30 to June 30 after both countries said over the weekend that all travellers would need to self-isolate for 14 days after arrival.

Hong Kong's Cathay Pacific Airways Ltd said on Monday it had agreed to a US$703.8 million deal with lessor BOC Aviation Ltd to sell and lease back six Boeing Co 777-300ER airplanes to raise much-needed cash.

The carrier said its full-service airlines, Cathay Pacific and Cathay Dragon, had made an unaudited loss of HK$2 billion (S$367 million) in the month of February alone. Cathay Pacific will cut up to 90 per cent of its capacity in April, up from an earlier plan of 65 per cent 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.

Japan's ANA Holdings Inc said it would cut 2,630 more international flights serving 58 routes across its network between March 29 and April 24.

The only bright spot for airlines 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 are both flying some planes without passengers to transport cargo due to high demand. AFP, REUTERS

READ MORE: SIA cuts more flights, to run at half its original capacity amid virus fallout