Lion Air Stops Flying as Curbs and Virus Tests Deter Passengers

(Bloomberg) -- Indonesia's Lion Air said it is halting all flights indefinitely because of the impact coronavirus-related measures such as compulsory tests for passengers have had on travel.

The carrier, whose slogan is “we make people fly,” is grounding its fleet from Friday, according to a statement. It had suspended scheduled domestic flights late last month. Lion Air has 138 aircraft, a spokesperson said, and a route network throughout Indonesia and other parts of Southeast Asia, such as Vietnam and Malaysia. Its units Batik Air and Wings Air, which have a combined fleet of 140 planes, also won't fly.

Indonesia banned air travel from April 24 to try to limit the spread of coronavirus through the archipelago, where confirmed infections are now approaching 28,000 cases. Some exceptions have been made for essential travel for certain businesses and for family emergencies, and after passengers pass tests to show they aren't infected with the disease.

Lion Air passengers had to arrive at the airport four hours before flights and produce documents including health declaration forms and business assignment letters from companies. The Indonesian government has also limited load factors on planes, making it hard for airlines to turn any profit.

“Lion Air Group's decision was made after evaluating previous flight operations in which many customers were unable to carry out air travel because they couldn't fulfill the documents and requirements needed,” spokesman Danang Prihantoro said in an emailed statement.

Privately held Lion Air hasn't provided guidance on how its financials have been affected by the virus, but it has already cut salaries of staff, including pilots, cabin crew and management, and deferred festive-season bonuses.

The pandemic has hit the Indonesian airline industry hard, with foreign visitor numbers slumping 87% in April from a year earlier. Flag carrier PT Garuda Indonesia said in April that its first-quarter operating revenue could drop 33%, while AirAsia Indonesia warned its net income may plunge more than 75%, hurting its ability to repay debt.

In October 2018, a Boeing Co. 737 Max operated by Lion Air crashed in the Java Sea, killing all 189 people on board. It was the second-deadliest airline disaster in Indonesia's aviation history. The 737 Max remains grounded globally following a second crash in Ethiopia the next year.

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