Coronavirus could bankrupt almost all of the world's airlines in just a few weeks, experts have predicted.
The impact is already clear in the UK. On Monday British Airways, easyJet and Ryaniar all announced plans to heavily cut back on flights, while Tui suspended almost all its travel operations "until further notice".
And while all the firms said they had funding to cover their cuts, experts have said this could run out before the summer unless they get help.
"As the impact of the coronavirus and multiple government travel reactions sweep through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants," CAPA Centre for Aviation said in a statement on Monday.
"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."
Airlines are already appealing to their respective Governments for help.
In an unusual joint statement, the world's three main airline alliances – oneworld, SkyTeam and Star Alliance – called for government aid to alleviate the "unprecedented challenges" faced by the industry.
EasyJet said it would likely ground most of its fleet as it joined Virgin Atlantic in calling for government support.
"European aviation faces a precarious future, and it is clear that coordinated government backing will be required to ensure the industry survives," chief executive Johan Lundgren said.
CAPA said coordinated government and industry action is immediately needed to avoid a "catastrophe".
Bernstein analyst Daniel Roeska said: "Airlines are siphoning cash and have no way of stopping it" as bookings grind to a halt and traffic collapses.
With many carriers now dependent on government help to survive, Roeska added, "the key focus should be on emergency liquidity support and enabling short-term layoffs or working-hour reductions to safeguard cash."
Source: Read Full Article