European airlines braced for free fall

Some 30,000 flights had been cancelled even before the Trump ban really bites, and German media reported that CEO Carsten Spohr planned to ask Chancellor Angela Merkel and other European governments for emergency aid.

British Airways CEO Alex Cruz has flagged job cuts and the grounding of aircraft in a memo to staff entitled "The Survival of British Airways", according to media reports.

"We will be parking aircraft in a way that we have never had to do before. Please do not underestimate the seriousness of this for our company," he said.

Investors reacted to the news of job cuts by pushing up stock in BA's parent company IAG stock 4.9 per cent in Friday trading in London, but the share price has fallen 44 per cent in the past month. Lufthansa shares also rose on the German bourse on Friday, having lost 38 per cent since mid-February.

It's not just the share price that airlines have to worry about, but also their creditworthiness.

Ratings agency Fitch warned on Friday (AEDT) that the bigger airlines would "likely experience rating pressure, due to greater than expected reduction in demand draining liquidity and pressuring credit metrics".

"Financial distress is likely among smaller regional carriers or those already under pressure but widespread bankruptcies among rated carriers would not be anticipated," Fitch said.

British Airways, which Fitch has at BBB- with a stable outlook, faced moderate risk of a rating action. The agency rated its "solid balance sheet and strong liquidity" but said falling demand and travel restrictions would hit passenger numbers.

French Finance Minister Bruno Le Maire promised aid to any state-owned company that needed it, which would include Air France-KLM, in which the government has a 14.3 per cent stake.

The company is reportedly preparing a crisis plan to deal with an "unprecedented situation". Its share price has halved in the past month.

The European Union's top competition bureaucrat, Olivier Guersent, said on Saturday (AEDT) that airlines would "suffer a lot" from the crisis and may likely "need to be compensated".

The EU has strict rules against member states giving their national industries unfair advantage through subsidies. The European Commission has been investigating several potentially illegal handouts that Rome has previously given debt-stricken Alitalia.

But Mr Guersent distinguished emergency aid, which would be permissible, from the EU's probe into potentially illegal Italian state aid to Alitalia.

Norwegian Air Shuttle has also sought a government bailout, with CEO Jacob Schram telling a press conference on Saturday (AEDT) that he was confident the government would step in and help the ailing budget carrier.

The Norwegian government has already slashed air passenger duty for a nine-month period and offered tax relief to airports operator Avinor.

The aviation solvency crisis is not limited to Europe. Delta Airlines has reportedly sought a handout from the White House, and Korean Air has warned that if the crisis drags on it may threaten the airline's survival.

Qantas has cut capacity by 23 per cent, delayed new routes, shelved a $150 million share buyback and abandoned its financial guidance.

In another blow to the travel sector, British travel insurers Churchill, Direct Line and Aviva all said they'd suspend the issue of new policies, allowing them to focus on existing customers.