Because of Corona, airlines around the world may go bankrupt by May
LONDON, UK (CNN) – With the spread of the Corona virus around the world and the travel restrictions designed to contain it, many airlines face a severe drop in their operations, which may force them to resort to government bailouts within weeks to avoid bankruptcy.
Many airlines have suspended their flights, including layoffs and adopting strong steps to maintain liquidity, amid increased travel bans and reduced demand for flights.
The world’s three largest airline alliances, One World, SkyTeam and Star Alliance, urged governments to “assess all possible means” to help the industry. These companies represent more than 58 leading airlines in the world. While some European airlines have already issued urgent appeals for help.
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In a letter sent Tuesday to US Congress leaders and Treasury Secretary Stephen Manuchin, United Airlines CEO Oscar Munoz warned of a current economic crisis facing airlines due to the Corona virus considered “much worse” than September 11.
“On behalf of about 100,000 employees at United Airlines, we – the company’s management leaders and organized trade unions – have a simple message: Please act quickly – this week – to protect our livelihoods. The financial impact of this crisis on our industry is much worse,” Munoz wrote in his message. From the sharp contraction we experienced in the aftermath of the September 11 attacks. “
According to the CAPA Aviation Advisory Center, most airlines in the world will go bankrupt by the end of May unless governments intervene.
“There is a need for coordinated action by governments and industry if we are to avoid a catastrophe,” the center said in a report released on Monday, adding: “Monetary reserves are rapidly declining as fleets stop.”
And confirmed the size of the worsening crisis on Monday, after the largest economic airline in Europe, “Ryanair” announced that it will suspend most of its fleet over the next 7 to 10 days.
Lufthansa, which owns national airlines in Germany, Switzerland, Austria and Belgium, also said the group’s airlines are in discussions with their governments about “receiving active government support if it becomes necessary”. One of its subsidiaries, Austrian Airlines, also temporarily suspended all flights from 19 March.
Most major airlines around the world have announced deep cuts to their schedules and suspended hundreds of aircraft. The employees were also asked to take voluntary unpaid leave, while senior executives received cuts in their wages, in what may be considered the worst aviation crisis in history.
