With travelers preferring to stay at homes and carriers suspending their services amid the COVID-19 pandemic, airlines around the globe could go bankrupt by May this year, CAPA Center for Aviation has cautioned.
CAPA Center for Aviation is a world-leading aviation analysis and research firm.
According to CAPA, the Coronavirus pandemic would have devastating consequences for all airlines. If urgent action isn’t taken, all airlines will go bankrupt in just a few weeks.
In an official statement released recently, CAPA cautioned:
As the impact of the coronavirus and multiple government travel reactions sweeps through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.
Tickets cancellations have exceeded bookings as governments across the world are discouraging international travel to contain the spread of Coronavirus, CAPA stated.
Forward bookings are far outweighed by cancellations and each time there is a new government recommendation it is to discourage flying. Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full.
CAPA claimed that demand for air travel has recorded an unprecedented decline recently and the industry is at the brink of catastrophe. The industry and governments must coordinate to pull back the industry from the verge of disaster, they concluded.