New Delhi, Mar 16: Due to the coronavirus pandemic, most airlines in the world will be bankrupt by the end of May and only a coordinated government and industry action right now can avoid the catastrophe, said global aviation consultancy firm CAPA in a note on Monday.
"As the impact of the coronavirus and multiple government travel 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," it stated.
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."
Cash reserves are running down quickly as fleets are grounded and "what flights there are operate much less than half full", it added.
"Forward bookings are far outweighed by cancellations and each time there is a new government recommendation it is to discourage flying. Demand is drying up in ways that are completely unprecedented. Normality is not yet on the horizon," it said.
India's largest airline IndiGo -- which has around 260 planes in its fleet -- said on Thursday that it has seen a decline of 15-20 per cent in daily bookings in the last few days.
The low-cost carrier had stated that it expects its quarterly earnings to be materially impacted due to such decline.
CAPA said the failure to coordinate the future will result in protectionism and much less competition.
"The alternative does not bear thinking about. An unstructured and nationalistic outcome will not be survival of the fittest.
"It will mostly consist of airlines that are the biggest and the best-supported by their governments. The system will reek of nationalism. And it will not serve the needs of the 21st century world. That is not a prospect that any responsible government should be prepared to contemplate," the consultancy firm said.
Comments
An Indian Haj subsidy that did not exist!
Thank you Prime Minister Modi for ending Haj subsidy that never existed.
I completely welcome this move making the announcement, minister Mukhtar Abbas Naqvi said: “We believe in empowerment without appeasement.”Naqvi did not elaborate what he meant by “appeasement” but for decades, Haj subsidy remained a whip in the hands of right-wing parties to attack political rivals. Bharatiya Janata Party to embarrass rivals by accusing them of “appeasing” Muslims by subsiding expenses involved in the pilgrimage to Makkah and Madina. Angered by this attack, several Muslims have been demanding an end to the subsidy.
However, it is important to understand what this subsidy was and whether Muslims actually benefitted from it. In 2016-17, the government budgeted Rs 4.5 billion subsidy for around 100,000 Muslims who performed Haj last year. Each pilgrim paid around Rs 220,000 (amount varies each year) for airfare; stay in Makkah and Madina and for miscellaneous expenses. This money is paid to government-managed Haj committees which then transfers this money to other agencies. In other words, each Muslim pays for his/her own Haj expenses.
A significant chunk of money paid by Muslims goes to India’s government-owned national carrier Air India which enjoys a virtual monopoly on Haj circuit. The airline picks up passengers from around a dozen cities and flies them to Jeddah. The Air India inflates India-Jeddah tickets during the Haj season. This so-called government subsidy is used to pay for tickets that are always higher than the prevailing airfare charged by other airlines. A breakdown would show that an Air India ticket to Jeddah would cost more than a trip to Los Angeles from India. Essentially, the government takes money from one pocket and puts it back in another. Muslim have always demanded global tenders for Haj flights and for providing accommodation in Makkah and Madina..
However, while Naqvi sought to take a high moral ground by claiming that his party appeases no section of the society, his own government spends billions of rupees on organizing Hindu pilgrimages every year
Naqvi saab, this is what you learnt in Madrasa? U r Back-Stabbing Muslims. There is no 1% quality of muslim in you. After joining BJP you have lost it. First learn humanity. Almighty will give answers for all problems you have created for others.
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