[US] The Outlook For Airlines Is Getting Worse

13 MAY 2020

In the wake of the COVID-19 pandemic, air travel has come close to a complete standstill and industry executives believe the industry could shrink as the situation continues to worsen, abc7 reports.

Speaking over the weekend, billionaire Warren Buffett announced that he had offloaded his company's entire stake in major US airlines, citing his belief that he had been mistaken in his industry valuation. Share prices for American, Delta and United airlines dropped by 13-14 per cent on Monday while Southwest saw a 9 per cent decline. (Link via original reporting)

A rescue plan for low-cost carrier Norwegian Air Shuttle was approved by shareholders. Under the plan, debt will be swapped for equity in an attempt to access a slice of the government's 3 billion kroner ($290 million) guarantees.

90 per cent of Norwegian Air Shuttle’s workforce has already been laid off.

Meanwhile, the European Union has reportedly approved 7 billion euros ($7.6 billion) in loans and guarantees for the French state to provide to Air France. The airline said in a statement, via its Twitter account, that Air France will receive 3 billion euros ($3.28 billion) in direct loans from the French state and a 4 billion euro ($4.37 billion) state-guaranteed bank loan. (Link via original reporting)