Popular aviation consultancy Centre for Asia Pacific Aviation (CAPA) has said that the coronavirus pandemic may cause many airlines to become bankrupt by the end of May this year.
CAPA’s statements come at a time when many of the airlines across India have decreased a number of flights due to various travel restrictions imposed by the government.
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“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.
According to CAPA, the only way in which airlines can be saved from a ‘catastrophe’ is when coordinated government and industry action is taken.
“Coordinated government and industry action is needed – now – if catastrophe is to be avoided,” it said.
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It also said that 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. Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full,” it added.
The Centre on Tuesday prohibited travel of passengers from Afghanistan, Philippines, Malaysia to India till March 31, 2020.