Global airlines are fast running out of cash after cutting their capacity by 90% or even grounding entire fleets due to the increasing dread of the novel coronavirus. This comes as almost all the major countries have imposed broad travel restrictions on travellers. Meanwhile, the deadly coronavirus has infected 204,831 and killed 8,272 across the globe.
According to international media, the outbreak COVID-19 has wiped 41%, or $157 billion, off the share value of the world's 116 listed airlines, with many using up their cash so fast they can now cover less than two months of expenses. Meanwhile, the industry's main global body, the International Air Transport Association (IATA), estimates the sector needs up to $200 billion in government support to help airlines survive.
This comes as Global aviation consultancy firm CAPA on March 16 said that if coronavirus infections continue then by the end of May-2020, most airlines in the world will be bankrupt. The global consultancy firm added that a coordinated government and industry action was needed to avoid the catastrophe. This comes as the deadly virus has infected 1,70,027 and claimed the lives of 6,524 people globally.
In a public statement it said that as the impact of COVID-19 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. It said, “Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full. Forward bookings are far outweighed by cancellations and each time there is a new government recommendation it is to discourage flying. Demand is drying up in ways that are completely unprecedented. Normality is not yet on the horizon.”