In a note on Monday, global aviation consultancy firm CAPA said that most airlines in the world will be bankrupt by the end of May due to the coronavirus pandemic and that only a coordinated government and industry action right now can avoid the catastrophe.
India is planning a rescue package worth as much as $1.6 billion (Dh5.9b) for the aviation sector, which has been battered after the coronavirus outbreak forced countries to close borders and brought air travel to a near-halt, two government sources told Reuters.
Malaysia Airlines Bhd said travel bans and plummeting demand around the world due to the Covid-19 pandemic have put the loss-making national carrier at risk of bankruptcy.
Heavily indebted spending plan provider, Norwegian Air claimed Friday that it required immediate assistance from government to enhance its cash money setting."We welcome the fact that the government has chose to remove aviation taxes in Norway, but sadly, this is not enough as we're in a very demanding situation at the moment", it claimed in a declaration, asking government to increase its feedback.
On Monday Air New Zealand announced it was cutting 30 per cent of its staff.
Air France-KLM reported a "sharply deteriorated financial trajectory" as it plans to cut capacity by 70%-90%.
Along with this, the statement said that airlines are rapidly reducing their cash reserves, as their planes are not able to fly and the ones that are flying are more than half empty.
CAPA Aviation said the impact could wipe out the aviation industry entirely unless governments act quickly in a co-ordinated effort. Forward bookings are down by more than 30 percent too, indicating dark clouds for the Indian aviation industry.
The unprecedented lack of demand to travel due to travel advisories and visa restrictions over the spread of coronavirus has resulted in a shock which will be far deeper and much longer than what the world saw in 2008, CAPA added.
"Air India is considering a 5 per cent pay cut to its employees as it faces huge financial crisis due to the ongoing coronavirus outbreak, which has brought nearly its entire worldwide operations save the US, Canada and a few other markets, to the ground", a source told PTI.
The three biggest global airline alliances, oneworld, SkyTeam and Star Alliance, urged governments to "evaluate all possible means" to assist the industry.
The company warned governments are failing to co-operate, citing President Trump's decision to ban flights from Europe which came as a surprise to European Union leaders. It said that this "will not only help the company counter the short term reduction in capacity, but will also ensure that a cross section of our employees stay away from the workplace for a month at a time to ensure business continuity".
UBS analysts said the latest travel restrictions would have a significant effect on Qantas' global traffic, which historically accounted for around 45 per cent of revenue and 25 per cent of earnings before interest and tax. Smaller rival SpiceJet Ltd. slumped 9.9%, hitting the daily limit.