Coronavirus is not only killing human beings but the global economy also.
Within the next 60 days, due to the catastrophic impact of the virus outbreak on the global economy, it has been predicted that most of the airlines all over the world will go bankrupt.
A report released by the global aviation consultancy firm Centre for Asia Pacific Aviation (CAPA) says many airlines have already started falling into technical bankruptcy or in breach of debt covenants.
Only coordinated action by the governments and aviation industry can save them, CAPA has 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,” reads the report released by the CAPA.
“As the 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,” warns the report.
According to the report, the demand for travel has fallen drastically since the last two weeks after countries – due to Coronavirus outbreak – have put in force travel advisories and Visa restrictions across the world.
Stating that the demand is drying up in ways that are completely unprecedented, the report highlighted that bookings are being cancelled and cash reserves are running down quickly as fleets are grounded and the operating flights are less than half full.
“Each nation is adopting the solution that appears best suited to it, right or wrong, without consideration of its neighbours or trading partners,” says the report, adding the situation is so worrisome that airlines will have to cut the salaries of its corporate officers by 50 per cent as the capacity for April and May will be reduced by 50 per cent.
“Inevitably, once we exit this tunnel - as we will - the world will be a different place; aviation will be no exception,” CAPA said.