Airlines operating routes in Coronavirus-stricken Europe have been flying ghost flights since the virus arrived in February. The UK's national carrier, British Airways, was reporting a 25% capacity hit around the middle of February, and it has not been alone in feeling the pain as capacity continues to get slammed.

Under EU rules, airlines operating out of Europe must run not less than 80 per cent of their flights on each slot, in order to maintain their hub presence and not forfeit slots to a competitor. This is the so-called “use-it-or-lose-it” rule. The continuing application of this rule by the EU has obliged airlines to run ghost flights, with only a handful of passengers aboard, at the cost of thousands of gallons of aviation fuel. 

Following representations by the UK government to the European Commission, the EU headquarters in Brussels has indicated that the 80/20 rule will be suspended. 

Before this decision, the rules had been suspended on only two previous occasions, namely 9/11 and following the outbreak of SARS in 2003 when (ironically) demand impact on routes was considerably lower than what airlines have experienced in the past three weeks. Now, the 80/20 rule has been relaxed on all routes operated in and out of mainland Europe, in addition to slots used to fly to China and Hong Kong.

Notwithstanding the UK's exit from the European Union ("Brexit"), the UK and its airlines (notably British Airways and Virgin Atlantic) are still obliged to play by EU rules until the end of 2020.

Ryanair have cancelled flights between the UK and Italy until 9 April, and easyJet have cancelled most of its flights to Italy, as have Air France. Spain has also banned direct flights with Italy, which amount to 9 per cent of all Spanish international air traffic. Norwegian Air has said it will cut about 3,000 flights in the next three months, about 15 per cent of its capacity.

The International Air Transport Association (IATA) has indicated that the virus could erase up to USD113 billion (GBP90 billion) from global airline sales. UK regional operator Flybe went into liquidation last week, as reduced capacity drove the final nail into the stricken carrier's coffin (more about this in our blog here: 

https://matthewfeargrieve.wordpress.com/2020/03/05/matthewfeargrieve-coronavirus/ 

Meanwhile, Korean Air, having cut more than 80 per cent of its international capacity, has been making worrying noises about its ability to survive if the Coronavirus crisis continues. Which it looks set to do. Our eyes will soon be turning to the US, and its carriers, as the virus makes itself felt there. Delta Air Lines and American Airlines have each warned that its profits targets for 2020 are under threat, and that they will likely need to reduce capacity on a large number of routes.

You can read more of Matthew Feargrieve's blogs here: https://medium.com/@matthewfeargrieve