TLI Staff
New Delhi: With Covid-19 playing havoc across the world and countries sealing their borders, most airlines could go bankrupt by May end this year.
Global aviation consultancy Centre for Asia Pacific Aviation (CAPA) on Monday said that 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.
“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,” CAPA has said highlighting the crisis airline face in the wake of Coronavirus spread.
The aviation consultancy said that governments are failing to cooperate. At the same time, while governments are grappling with the health challenges of Coronavirus, it is clear that there is little instinct to act cooperatively.
Messages are mixed and frequently quite different.
“Each nation is adopting the solution that appears best suited to it, right or wrong, without consideration of its neighbours or trading partners,” CAPA said.
Citing the example of flights suspension with Europe by the US, the research firm said that President Trump announced the effective cancellation of airline access to most Europeans and he didn’t even advise his counterparts in advance let alone consult with them.
“National self-interest over cooperation is the evolving threat for aviation. The fear is that, as a collapsed airline system is reconstituted, similar national self-interest will prevail. That’s important because the aviation industry is about much more than airline health. It is crucial to global communications and trade,” CAPA said in its report.
Death toll has been rising rapidly across the world as Coronavirus is spreading fast to each street and corners. Over 6,000 people have died and nearly 1,60,000 people have tested positive for the deadly virus forcing the governments in the world to lock down cities and declaring health emergency.
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