According to The Centre for Aviation (CAPA), the coronavirus crisis could bankrupt most airlines around the world by May. If travel restrictions continue then there will be great economic stress on airlines.
The group is encouraging governments to work together in order to mitigate the risks.
“By the end of May-2020, most airlines in the world will be bankrupt,” CAPA said on Monday. “Coordinated government and industry action is needed — now — if catastrophe is to be avoided.”
“When, for example President Trump peremptorily announced the effective cancellation of airline access to most Europeans, he didn’t even advise his European government counterparts in advance, let alone consult with them. Other governments have performed little better,” the group continued.
Many airlines have probably been driven into technical bankruptcy already, CAPA said, adding that cash reserves are running low and forward bookings are “far outweighed” by mass cancellations made each time a new government’s recommendation discourages flying.
National governments are also sending “mixed and frequently quite different” messages, with each nation adopting a solution that appears best for itself without consulting neighbors or trading partners, CAPA said.
Trump made the announcement about the 30-day travel ban from Europe for foreign nationals during an Oval Office address last week.
Amid the outbreak, the U.S. Centers for Disease Control and Prevention (CDC) recommends travelers limit nonessential travel to China, Iran, the United Kingdom, Ireland and most European countries.
CAPA urged national governments to create a framework for managing fallout from the coronavirus pandemic now, rather than waiting to create a basis to work from.
“Inevitably, once we exit this tunnel — as we will — the world will be a different place; aviation will be no exception,” CAPA added.
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