The Legal Impacts of COVID-19 in the Travel, Tourism and Hospitality Industry

Few airlines, though, serve a vast domestic market like China’s, being surpassed only by American airlines. The European Union’s single aviation market looks large, but is fragmenting as the Member States put up barriers, for example, Denmark and Poland have already barred most non-citizens from entering. Asian airlines that rely on traffic to and from China, but not within it, are still reeling. On the one had, Cathay Pacific, based in Hong Kong, has cut capacity by 65% in March and April, anticipating even more cuts in May; on the other, Korean Air has lopped 80% of its schedule. Like BA’s Mr. Cruz, it warns that a prolonged disruption presents an existential threat. Chinese airlines can also count on generous government support as most of the big ones are state-owned (China Eastern and China Southern) or could be, through a possible nationalisation (speculation regarding Hainan Airways’ parent company, HNA). Beijing has already promised bail-outs to make up for their losses, estimated to be around 3 billion dollars in February alone. Lufthansa is talking to European governments about financial support, which may require relaxing EU state-aid rules. President Trump’s vague talk of assistance to stricken industries, including airlines, remains just that for now. At the moment, most airlines are desperately trying to preserve cash. Besides cutting flights, many are asking or forcing staff to take unpaid leave. Norwegian Air Shuttle, an indebted low-cost airline in the midst of restructuring, has temporarily laid off half of its 11,000 workers. Scandinavia’s SAS is laying off 10,000 workers, 90% of its workforce, as it cancels most of its flights. KLM, the Dutch flag-carrier, said it would cut 2,000 jobs in the coming months. Lufthansa has suspended its