Skies clear as further coronavirus curbs ground more flights

Scoot and Singapore Airlines aircraft sit on the tarmac at Changi Airport, following the outbreak of the coronavirus disease. (Reuters)
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Updated 24 March 2020

Skies clear as further coronavirus curbs ground more flights

  • India’s commercial airlines were to cease domestic flights from midnight Tuesday

SINGAPORE: Widening travel curbs to contain the spread of the coronavirus led to further flight cancellations on Monday, with new restrictions spanning India, Australia, New Zealand, the UAE, Hong Kong, Singapore and Taiwan.

Globally the number of scheduled flights last week was down more than 12 percent from a year ago, flight data provider OAG said, with many airlines having announced further cuts to come.

“It is a war against a virus,” said Andrew Herdman, director general of the Association of Asia Pacific Airlines.

India’s commercial airlines were to cease domestic flights from midnight Tuesday, a Civil Aviation Ministry spokesman said, the latest country to impose tight air travel restrictions.

Cargo flights were exempt from the order.

The impact on planemakers has been deep and sudden and on Monday planemaker Airbus announced new steps to bolster its financial position, including the signing of a credit facility for €15 billion ($16.1 billion).

Airbus added it was withdrawing its 2020 financial guidance, dropping a proposed 2019 dividend that had a cash value of €1.4 billion ($1.5 billion) and suspending funding to top up staff pension schemes.

Its US rival Boeing is under similar pressure and has called for a $60 billion lifeline for the US industry.

Australia and New Zealand both warned against nonessential domestic travel, while the UAE halted flights and Hong Kong, Singapore and Taiwan took steps to ban foreign transit passengers.

“What we have to do is take care of the institutions and people’s livelihoods, the soft capital, so that we can restart effectively in a timely way when the time comes,” Herdman said.

The UAE, home to major carriers Emirates and Etihad Airways, said it would suspend all passenger flights and airport transit for two weeks to help rein in the virus.

The UAE’s decision takes effect in 48 hours, with cargo and emergency evacuation flights exempted. Emirates responded by saying it would temporarily suspend all passenger services for two weeks from March 25.

Etihad Airways told staff it was temporarily cutting management wages by 50 percent and other staff salaries by 25 percent due to the impact on its business by the coronavirus, said two sources familiar with the matter.

The carrier, which will stop all passenger flights for two weeks from Wednesday, did not immediately respond to a request for comment.

Wages would be cut for the month of April, the sources said.

“We will need to take some drastic measures to weather the storm over the next few weeks and avoid job losses as much as possible,” Etihad Chief Executive Tony Douglas said in a staff email seen by Reuters.

Singapore Airlines grounded most of its fleet after the Asian city-state banned entry or transit by short-term visitors on Sunday.

“This is the greatest challenge in the SIA Group’s existence,” Chief Executive Goh Choon Phong said in a memo to staff.

The group said it had reached agreements with unions on a set of cost-cutting measures, including unpaid leave, affecting about 10,000 staff. The chief executive is taking a 30% salary cut from the start of April.

The airline normally relies heavily on connecting passengers from markets such as Australia to Europe, and India to North America through its Singapore hub.

Taiwan announced similar travel curbs that will hit China Airlines and EVA Airways, which have marketed Taipei as a convenient and affordable transit airport, competing with Hong Kong and Singapore.

In Hong Kong, Cathay Pacific Airways Ltd. has cut its passenger capacity by 96% in April and May as government restrictions hit travel.

In the southern hemisphere, Qantas Airways Ltd, Virgin Australia Holdings Ltd. and Air New Zealand Ltd. were re-examining schedules after their governments advised against non-essential domestic travel.

Regional Express Holdings Ltd. (REX), which serves remote Australian towns, said it would shut all operations, except some subsidised routes, from April 6, unless governments quickly expressed a willingness to underwrite its losses.

In mainland China, domestic capacity has been rising as some internal curbs are eased, but there are concerns that passengers on international flights could re-import the virus.

China’s aviation regulator said all international flights due to arrive in the capital will be diverted to other airports from Monday. 


Virtual certainty? Bankers ask if success of remote roadshows will last

Updated 10 min 47 sec ago

Virtual certainty? Bankers ask if success of remote roadshows will last

  • All over the world, companies and their advisers have given up on the traditional multi-city investor roadshow

HONG KONG: Who needs expensive lunches at glitzy hotels and fancy restaurants to court investors for bond deals or the sale of new shares on the stock exchange?

In a world governed by quarantine and social distancing rules, even lead managers on multi-billion dollar deals have had to curtail travel and drop the personal touch in favor of video conferences and phone calls to woo potential investors.

Warner Music Group is one of more than a dozen companies that launched an initial public offering (IPO) in the aftermath of the COVID-19 pandemic and saw its shares soar on the first day trading. “The wear from a virtual roadshow is much less than the wear and tear on the old normal roadshow. I was pleasantly surprised,” Warner Music Group CEO Stephen Cooper said following this company’s IPO this week.

Some investors were also happy with the switch, because they saved time traveling to meetings with companies and their IPO advisers.

“When you meet face-to-face, you have to get everyone together into the lift, some people need to get their Starbucks … that one hour turns into one-and-a-half hours,” said Khiem Do, head of Greater China investments at Barings in Hong Kong.

All over the world, companies and their advisers have given up on the traditional multi-city investor roadshow — lasting up to two weeks — in favor of virtual sessions that only last a few days.

So far the change has worked. US IPOs excluding those of special purpose acquisition companies have yielded average gains of 35 percent, according to data firm IPOScoop. The S&P 500 Index has risen only around 6.6 percent in that period.

“In New York City you would normally do six or seven one-on-one meetings plus a group event. Boston is about the same. Now you can do at least nine in a day with no travel time,” said Taylor Wright, co-head of US equity capital markets at Barclays.

However, Wright and other bankers questioned whether virtual roadshows will completely replace physical gatherings when the pandemic subsides. They said that many companies behind the IPOs of the last few weeks had warmed up investors in person before the pandemic, and younger companies may not be able to court investors only virtually.

“If roadshows cannot carry on, I feel some investors won’t be willing to invest as happily,” said Zhenro Properties chief financial officer Kenny Chan, speaking in mid-May.