Believe it or not but the Covid-19 impact is massive and it can really bankrupt the airlines by end of May. As per reported by Bloomberg, the coronavirus pandemic will bankrupt most airlines worldwide by the end of May unless the governments and the industry take coordinated steps to avoid such a situation, an aviation consultant warned.
As you can see now, lot of the major airlines are doing as much as they can to prevent this but they might probably been driven into technical bankruptcy or substantially breached debt covenants already, Sydney-based consultancy CAPA Centre for Aviation warned in a statement Monday (March 16).
Carriers are depleting their cash reserves quickly because their planes are grounded and those that aren’t are flying more than half empty, it said.
“Coordinated government and industry action is needed – now – if catastrophe is to be avoided, ” CAPA said. Otherwise,”emerging from the crisis will be like entering a brutal battlefield, littered with casualties, ” it said.
Most of the biggest carriers in the US, China and Middle East are likely to survive because of government help or support from their owners, CAPA said.
Airlines have been among the biggest corporate casualties of the virus outbreak as the coronavirus grinds air traffic to a halt. Carriers from American Airlines Group Inc to Australia’s Qantas Airways Ltd have slashed capacity, while some like Sweden’s SAS AB have temporarily laid off most staff. Even the MAS is offering their employee to take up the unpaid leave,
Flybe, Europe’s biggest regional airline, has already collapsed. Carriers could face as much as US$113 billion in lost revenue this year, according to the International Air Transport Association.