The increasingly severe travel advisories and restrictions that have been implemented by countries worldwide have caused airlines to cancel massive amount of flights. That, added to the flight cancellations by customers, have caused what might be irreparable damage to profits.
Now, an aviation consultant has confirmed that the damages suffered by airlines would be catastrophic, saying that the pandemic will bankrupt most airlines by the end of May.
Sydney-based consultancy CAPA Centre for Aviation said in a statement on Monday (16 Mar) that unless world governments and the industry take action, most airlines worldwide will be bankrupt by the end of May, reported Bloomberg.
Flight cancellations and travel restrictions have caused many planes to be grounded, and those that a still flying are half-empty — which leads to airlines’ cash reserves being drained rapidly, CAPA said.
In fact, many airlines are probably already technically bankrupt or have breached their debt covenants in a large way, it added.
Bloomberg also quoted CAPA as saying that government and industry action was needed, or:
Emerging from the crisis will be like entering a brutal battlefield, littered with casualties.
Malaysia Airlines is one of the airlines that is facing bankruptcy due to the pandemic.
Many airlines worldwide, like American Airlines and Qantas Airways, have cut their flights.
Others like Sweden’s SAS have retrenched staff.
European regional airline Flybe has already collapsed.
The International Air Transport Association has predicted that airlines could lose as much as US$113 billion (S$161 billion) in lost revenue this year.
While we sympathise with the airlines, we also understand the need for travel restrictions and for people to cancel their travel plans.
It’s truly a no-win situation for all.
We hope that governments and the industry can provide much-needed help to our struggling airlines so they can stay on their feet till the pandemic is over.
Featured image adapted from Facebook.
The PUB declared a flash flood at Boon Lay Way at 3.48pm.
Police arrested him two hours after a report was filed.
Kubur Search now has more than 2,000 downloads across platforms.
She spent over 5 years attempting to divorce her husband, who demanded money she could…
Time to upgrade your appliances or furnish that new BTO.
Good news if you frequently use the service, but you may have to wait longer.