SYDNEY: Global aviation consulting company CAPA said that most of the world’s airlines will be bankrupt by the end of May due to the coronavirus pandemic and that only concerted government and industry intervention right now will avert the catastrophe.
“As the impact of the coronavirus and multiple government travel reactions sweep through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants,” the firm said.
In the aftermath of the coronavirus epidemic, airlines worldwide have announced dramatic reduction in their operations. Delta Air Lines, headquartered in Atlanta, said it will land 300 aircraft in its fleet on Sunday and the flights by 40%.
The US has revoked all tourist visas for individuals belonging to the EU, the UK and Ireland. Similarly, all tourist visas and e-visas issued on or before 11 March were suspended by the Indian Government.
CAPA, in its note said, “By the end of May-2020, most airlines in the world will be bankrupt. Coordinated government and industry action is needed — now — if catastrophe is to be avoided.” Cash reserves are running down quickly as fleets are grounded and “what flights there are operate much less than half full,” it added.
“Forward bookings are far outweighed by cancellations and each time there is a new government recommendation it is to discourage flying. Demand is drying up in ways that are completely unprecedented. Normality is not yet on the horizon,” it said.
European leaders are poised to ban non-essential continental travel, the latest dramatic effort to curb the coronavirus pandemic that has disrupted civilization, destroyed economies, and killed thousands around the globe.