CAPA: most airlines heading for bankruptcy
The current coronavirus crisis could lead to the demise of many airlines before the summer, according to industry advisory firm Centre for Asia Pacific Aviation.
With government travel bans forcing them to cull routes, some are probably already technically bankrupt, or at least mired in debt, CAPA says.
"Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full," CAPA said.
The problem is being compounded by a lack of coordination between governments.
"While governments are grappling with the health challenges of coronavirus, it is clear that there is little instinct to act cooperatively. Each nation is adopting the solution that appears best suited to it, without consideration of its neighbours or trading partner," it says.
This ‘national self-interest over cooperation’ is a significant threat to the industry, citing the US ban on European travellers.
Although the largest airlines will survive with government financial assistance, cancellations far outweigh future bookings.
Even majors like United Airlines and Delta are not immune.
They have warned of possible mass job losses with capacity cuts of up to 50% expected in April and May.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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