The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Thursday related to the global economy, the work place and the spread of the virus.
KEEP YOUR SEATBELTS FASTENED: The U.S. is offering airlines a $25 billion aid package, but damage to the sector will be extensive and long-lasting. Industry analysts say it could be five years before the industry fully recovers.
— United Airlines’ flight schedule will be cut to 10% in May and it expects more of the same in June. In a letter to employees, CEO Oscar Munoz wrote that travel demand is “essentially zero and shows no sign of improving in the near-term.”
During the first two weeks of April, less than 200,000 people booked flights on United, down from about 6 million during the same period last year. “We expect to fly fewer people during the entire month of May than we did on a single day in May 2019,” Munoz said.
Job cuts at the airline, though prohibited through September under strings tied to the aid package, are likely in the fall.
— At American Airlines 32,000 workers have volunteered for early retirement or leave at reduced pay. American started the year with about 133,000 employees.
— Passenger traffic at Cathay Pacific Group fell 90% in March from a year earlier. The company said its schedule through may will be a “bare skeleton,” at only 3% capacity.
ECONOMIC PARALYSIS: Figures released by the U.S. Thursday revealed a collapse in housing construction, and millions more people who have lost jobs.
— A quarter of British businesses have closed their doors. The Office for National Statistics surveyed 5,316 companies to find out how many had shut down operations between March 23 and April 5.
Those that have remained open have furloughed an average 21% of their workers during that period. Britain has rolled out an aid package in which it will pay 80% of the wages of those workers retained, up to a monthly limit of 2,500 pounds ($3,150).
— The British government on Thursday is expected to extend a nationwide lockdown for several more weeks with health officials saying that the outbreak is peaking.
— The International Monetary Fund warns Pakistan’s budget deficit could hit a record 4 trillion Pakistani rupees (approximately $23.7 billion) this year because of the virus outbreak, accounting for nearly 9.2% of gross domestic product. The IMF said 25 countries are receiving debt relief. Pakistan is not among them.
FIELDS AND FACTORIES: The pandemic has created a potential nightmare for farmers, ranchers and dairy farms, as well as manufacturers. The labor-intense sectors cannot function without workers, who do their jobs in close quarters.
— More than 30,000 people have registered for special flights that will bring them from Romania to Germany to help with the harvest season, budget airline Eurowings said.
German farms rely heavily on Eastern European laborers for sowing, planting and harvesting crops.
— Italy’s severely ravaged region of Lombardy is pushing to relaunch manufacturing on May 4, the day that the national lockdown is set to lift. Lombardy’s plan focuses on maintaining a one-meter distance between workers, mandating the use of masks, mobile working where possible and the use of antibody blood testing, which is set to launch in the region on April 21.
Regional officials are considering mandating that offices and companies stagger their opening hours, to avoid cramming public transport. Italy’s deputy economic development minister, Stefan Buffagni, called the plan premature.
— Global stocks were mixed Thursday after unexpectedly weak U.S. retail and other data added to gloom about the impact of the coronavirus pandemic.