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Airline Industry fears bankruptcy in two months; countries summoned to find a rebound plan

#World – March 16, 2020 — In two months, airline companies will be bankrupt as cash flows are drying up and the industry is calling on global governments to coordinate in order to avoid a collapse.

“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.”

The position was, mere hours ago, shared within a media release from the Center for Aviation, CAPA and is another casualty of fears linked to COVID-19.

“…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.

Advetisement

Each nation is adopting the solution that appears best suited to it, right or wrong, without consideration of its neighbours or trading partners.”

Last week, International Air Transport Association, IATA forecast an economic free fall of $113 billion; now it appears the entire industry is at risk due to the unprecedented actions which governments are taking in the effort to contain the spread of the coronavirus, which emerged in December 2019.

Worldwide, over 181,000 people have tested positive for COVID-19, and while more than 78,300 people have recovered; the death toll in three months is significant at slightly above 7,100 people.

Today, France, Canada and Trinidad and Tobago closed their borders to visitors. 

Airport in Trinidad and Tobago

CAPA said, in most cases, these decisions are being made unilaterally with no consultation.

“Each nation is adopting the solution that appears best suited to it, right or wrong, without consideration of its neighbours or trading partners.  When, for example President Trump peremptorily announced the effective cancellation of airline access to most Europeans, he didn’t even advise his European government counterparts in advance, let alone consult with them. Other governments have performed little better.”

CAPA, in its analysis pointed out that the industry accounts for 20 percent new jobs worldwide and worries that a rebound will be skewed and possibly, detrimental to lesser known airline companies.

 “The alternative does not bear thinking about. An unstructured and nationalistic outcome will not be survival of the fittest.  It will mostly consist of airlines that are the biggest and the best-supported by their governments. The system will reek of nationalism.  And it will not serve the needs of the 21st century world.

Flights are being cut, planes grounded and staff laid off; among those reporting on the negative effects of the travel restrictions being imposed in response to the rapidly spreading COVID-19 virus are American Airlines, which has cut flights by 75 percent and Delta Airlines, which has dropped 40 percent of its commutes.

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