Most airlines may go bust in late May due to flight cancellations and the drop in passenger numbers caused by the Covid-19 pandemic, analysts at the Center for Aviation (Capa) said Monday.
“With the impact of the new coronavirus and multiple travel measures by governments around the world, many airlines are likely already in technical bankruptcy, or have at least substantially defaulted on their debt obligations,” Capa, based in Sydney (Australia).
Capa, a private body that studies the airline sector, said that outside China, large airlines have lost up to 50%, reports the EFE agency.
Regarding Chinese airlines, the agency specified that they have only lost just over 10% of their market value thanks to government support and despite the fact that the number of passengers fell by 84.5% in February in the Asian giant.
Capa criticized the poor coordination of governments and, in particular, regretted the decision of the President of the United States, Donald Trump, to cancel flights from Europe.
“It did not even inform its European partners in advance, let alone consult with any of them. Other governments have done a little better,” the agency said.
In this sense, he called for greater coordination between governments and airlines, recalling that the “nationalist” strategy will be “catastrophic” for the airline sector and, indirectly, for tourism.
“Tourism and the travel industry (…) have contributed to the formation of 20% of new jobs in recent years, mainly in developing countries,” says the note.
Red in the bags
Capa’s forecast comes the same day that the shares of major European airlines plummeted in the trading session, affected by travel restrictions, causing demand to drop.