Most Airlines May Go Bankrupt by May-end for Coronavirus, Says Global Aviation Body CAPA

New Delhi: The continuing spread of coronavirus may lead to bankruptcy of most airlines as early as May-end, said Centre for Asia Pacific Aviation, a leading industry advisory.

“Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full,” CAPA said in a statement on March 16.

As governments impose travel restrictions, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.

Nearly 5,800 people have died from the coronavirus that first broke out in China. About 1,60,000 have been infected.
Across the world, airlines have announced drastic reduction in their operations in the wake of the coronavirus outbreak. For example, Atlanta-based Delta Air Lines stated on Sunday that it would be grounding 300 aircraft in its fleet and reduce flights by 40 per cent.

The US has suspended all tourist visas for people belonging to the European Union, the UK and Ireland. Similarly, the Indian government has suspended all tourist visas and e-visas granted on or before March 11.

CAPA, in its note on Monday, said, “By the end of May-2020, most airlines in the world will be bankrupt. Coordinated government and industry action is needed – now – if catastrophe is to be avoided.”

The Indian government has suspended tourists visas till April 15 and has asked people to limit travel within and outside the country.

Similar steps have been taken by several countries. Many in the Middle-East, including Qatar and UAE, have suspended flights.
Indian airlines, including IndiGo, Vistara and Spice Jet, have already seen a drop in bookings, and reports say up to 50 aircraft could be grounded.