British Airways-owner, easyJet make drastic cuts to try to survive coronavirus

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© Reuters. BA plane taxis past tail fins of parked aircraft to runway near Terminal 5 at Heathrow Airport© Reuters. BA plane taxis past tail fins of parked aircraft to runway near Terminal 5 at Heathrow Airport

LONDON (Reuters) – The owner of British Airways and easyJet, Europe’s no.3 and no.4 airlines, said they would cut capacity drastically to try to survive the coronavirus outbreak which has stopped people traveling around the world.

IAG (L:), the owner of BA, said it would cut its flying capacity by at least 75% in April and May and its outgoing boss Willie Walsh would defer his retirement. The airline group, however, did not call for government help.

EasyJet (L:) said it could ground the majority of its fleet on a rolling basis, and its chief executive Johan Lundgren called for coordinated government backing to help the aviation industry survive.

Both airlines said they had strong balance sheets, providing details on their cash positions and credit facilities.

IAG, which also owns Iberia and Aer Lingus, said it had total liquidity of 9.3 billion euros, while easyJet said it had 1.6 billion pounds of cash plus an undrawn $500 million revolving credit facility.

While IAG’s Walsh has long-opposed any government help for aviation businesses, and said as recently as two weeks ago that government’s should not prop up airlines, EasyJet’s Lundgren called for help.

“European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over,” Lundgren said in a statement on Monday.

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