International Air Transport Association (IATA), a trade body representing 290 airlines of the world, has cautioned that globally, air carriers will lose at least $314 billion due to Coronavirus pandemic, a whooping sum! Moreover, Centre for Asia Pacific Aviation, a specialist airline advisory, has warned that by the end of May, “most airlines in the world will be bankrupt” without coordinated government and industry intervention.
The aviation sector was one of the first victims of the Coronavirus that originated in China. Furthermore, it appears that aviation and tourism could be the last of the areas to come out of the catastrophe. Although many airlines were already on the brink of collapse, the Coronavirus pandemic has turned out to their’ final nail’.
If the airlines are to survive, they will have to undergo significant changes keeping in mind the concept of ‘social distancing’ and other requirements. These changes will come at a high cost and also reduce the carrying capacities of the airlines. The required modifications, clubbed with a record fall in demand and cancellations, the hope of a government bailout or stimulus package is one of the last strings by which the aviation sector is hanging. However, government aid has been absent or difficult to come by in most countries.
So far, globally, government bailouts for aviation worth about $85 billion have been declared. Against this, the IATA has called for $250 billion aid for the global aviation industry. Some of the significant packages include a mega $58 billion by US President Donald Trump for the overall US aviation industry, €10 billion combine bailout to Air France by the French and the Dutch governments, €500 million by Italy for Alitalia, £600 million to EasyJet by the UK, etc. Many airlines in Spain, Norway, Germany, Switzerland, Austria, Belgium, etc. may soon receive the bailouts. However, many have not been that blessed. The country-wise list of some of the airlines which have gone bankrupt due to Coronavirus pandemic is given at the end of the post.
Summing it up, faced with recession and necessity of changes, it could take three years for the revival of the aviation industry. This estimate comes from the famous US legacy carrier Delta Airlines.
However, before we end let us take a look at an intriguing fact – ‘When the share prices of the major international airlines have dropped 50%-plus, the shares of the ‘big three’ Chinese airlines have lost only about 10%. Here, let us remind ourselves that everything related to Coronavirus pandemic and, of course, China is not at all a coincidence! In this war, World War III, China has successfully used its virus to kill a sector that contributes 10% of the world GDP and supports 65.5 million jobs globally, thus worsening the woes of the human race.
|Sr. No.||Country||Names of Airlines which have announced Bankruptcy|
|1||United States||Nantucket Express, Trans States Airlines, Compass Airlines, RavnAir, Miami Air International|
|5||Germany||Germanwings, German Airways|
|6||South Africa||South African Airways, South African Express|
|8||Australia||Virgin Australia Airlines|
|10||Norway||Norwegian Air Shuttle ASA|
|11||Belgium||CityJet (Brussels National base)|
|15||Sweden||BRA (Braathens Regional Airlines)|