Shattered airlines were left counting the cost of government support as countries from the United States to New Zealand set out conditions for bailouts needed to absorb the shock of the coronavirus pandemic.
Conditions include provisions that loans may convert to government equity stakes, while US airlines cannot increase executive pay or provide "golden parachutes" for two years. Air New Zealand's (AIR.NZ) bailout also depends on the company suspending its dividend and paying interest rates of 7 percent to 9 percent.
New Zealand on Friday offered its national carrier a NZ$900 million ($510 million) lifeline, which Finance Minister Grant Robertson said would help it survive after the government banned all non-resident arrivals to the country.
"That puts us in a very good position over the next several months," Air New Zealand chief executive Greg Foran told reporters of the loan, which it will not draw down immediately. "We would expect the airline industry will look different at the end of this. Not all airlines are going to survive."
Under the $58 billion US proposal for passenger and cargo carriers, the US Treasury Department could receive warrants, stock options, or stock.
"We are not bailing out the airlines or other industries – period," US Senate Appropriations Committee Chairman Richard Shelby said. "Instead, we are allowing the Treasury Secretary to make or guarantee collateralized loans to industries whose operations the coronavirus outbreak has jeopardized."
Norway will back airlines with credit guarantees worth up to 6 billion Norwegian crowns ($537 million), half of them to Norwegian Air Shuttle ASA (NWC.OL). Conditions include raising money from commercial banks and the equity market.
Finland, which owns a 56 percent stake in Finnair (FIA1S.HE), said it would guarantee a 600 million euro ($645 million) loan for the state carrier. The firm said it was implementing a funding plan that included drawing on available credit lines, sale and leasebacks of planes. Its stock jumped 16 percent.
The International Air Transport Association (IATA) has forecast the industry will need up to $200 billion of state support, piling pressure on governments facing demands from all quarters and a rapid worsening in public finances as economies slump.
"Money is very tight in most countries, so governments need to step back and be hard-nosed about any form of rescue ... but it all must come with strict conditions or strings, attached," Shukor Yusof, head of aviation consultancy Endau Analytics, said in an email.
Even with financial assistance, airlines around the world are placing thousands of workers on unpaid leave as they slash passenger capacity, deepening the shocks to local economies.
British Airways (ICAG.L) pilots will have to take two weeks of unpaid leave in each of April and May, and a cut to basic pay spread over three months, the company said on Friday in a joint statement with the British Airline Pilots' Association.
Britain's Heathrow Airport, usually Europe's busiest airport, is cutting costs by cancelling executive pay, freezing recruitment and reviewing all capital projects.
Air Canada (AC.TO) has more than 5,100 excess cabin crew after cutting its flying schedule and plans to start notifying them they will be laid off at least temporarily, its flight attendants union said.
The airline said it had begun talks with unions about temporary lay-offs but did not have final numbers yet.
On Friday, Cathay Pacific Airways (0293.HK) said it would slash nearly all passenger capacity as new government curbs make travel more difficult.
Its low-cost carrier, HK Express, will suspend operations from Monday until April 30, bringing forward plans to put employees on unpaid leave.
To preserve cash, airlines are also cutting executive pay, suspending dividends, selling planes, and flying cargo on empty passenger jets. This has led to surging cargo rates due to high demand - the only bright spot in the industry.
American Airlines (AAL.O) said on Thursday it would use some passenger jets to move cargo between the United States and Europe, its first scheduled cargo-only flights since 1984 when it retired the last of its 747 freighters.
In the Asia-Pacific, Qantas, Cathay, Korean Air Lines (003490.KS) are also operating some flights with empty seats but bellies full of cargo.