Airlines crash amid Coronavirus pandemic

Airlines crash amid Coronavirus pandemic

As the impact of the Coronavirus and multiple government travel reactions sweep through the world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.

Passenger numbers and bookings have dropped in recent weeks as countries closed their borders and holiday makers cancelled trips.

“The Coronavirus pandemic will bankrupt most airlines worldwide by the end of May unless governments and the industry take coordinated steps to avoid such a situation, an aviation consultant warned”, as seen on time.com.

“Many airlines have probably been driven into technical bankruptcy or substantially breached debt covenants already”, Sydney-based consultancy CAPA Centre for Aviation warned in a statement on Monday. “Carriers are depleting cash reserves quickly because their planes are grounded and those that aren’t are flying more than half empty”, they said.

European carriers made cuts to flights, costs, and staffing while stepping up calls for emergency aid.

Ryanair and EasyJet are grounding most of their fleet, while BA owner IAG is to cut capacity by 75%.

Holiday company Tui has said it will suspend the "majority" of its operations, affecting "package travel, cruises and hotel" bookings.

South America’s largest carrier, LATAM Airlines Group, cancelled 90% of its international flights as demand collapsed.

Airlines for America said the industry needs $25 Billion in grants, $25 Billion in loans and significant tax relief to survive. They also seek tax relief that could be worth tens of Billions of Dollars through the end of at least 2021.

Delta is in talks with banks to borrow about $4 Billion and an announcement is expected Tuesday, as Bloomberg reported.


Sources: centreforaviation.com, bbc.com, reuters.com, time.com

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