COVID-19: Airlines may lose $113 billion revenue; go bankrupt
With the number of confirmed coronavirus cases rising across the globe each day, it is being said that the pandemic will leave many airlines bankrupt by the end of May.
With the number of confirmed coronavirus cases rising across the globe each day, it is being said that the pandemic will leave many airlines bankrupt by the end of May.
According to the International Air Transport Association, the passenger carriers could face a loss of more than $113 billion in this year’s revenue.
In a Bloomberg News report, an aviation consultant pointed out that several airline companies will be facing financial crisis if the governments and the industry do not take substantial measures to bailout of the situation.
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A Sydney-based consultancy firm, CAPA Centre for Aviation, in a statement on Monday (March 16) warned the airlines that they may have been already driven into a technical bankruptcy or substantially breached debt covenants.
Due to countrywide lockdown in several nations and the flights being grounded, the carriers are digging into their savings and cash reserves or not making any profits due to the aircrafts flying with barely any passengers, the statement added.
As per the Bloomberg report, the CAPA said, “Coordinated government and industry action is needed – now – if catastrophe is to be avoided. If not, emerging from the crisis will be like entering a brutal battlefield, littered with casualties.”
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Aviation sector has been severely hit due to the COVID-19 pandemic which has brought the air traffic to a halt.
However, the biggest airline companies in the United States of America, China, and the Middle East are likely to survive the financial scare as their respective governments are extending help and the owners are supporting the corporates, CAPA said.
The statement comes in wake of several airlines, including Flybe, Europe’s biggest regional airline already collapsing and carriers from American Airlines Group Inc. to Australia’s Qantas Airways Ltd. slashing their flight capacity.
Meanwhile, Sweden’s SAS AB temporarily laid off most staff.
