Edited by Abhinav Dev Gupta
As the total cases of COVID 19 cross 6 lakh cases worldwide which put the future of an $885 Billion Airline Industry into uncertainty which was expecting a recovery after a challenging 2019. According to IATA(International Air Transport Association), it estimates a loss of about $252 Billion in passenger revenue for the industry which is 44% less when compared to 2019. So, $252 Billion will be wiped out and make things worse for Airlines to survive.
The Airline Industry may not fully recover from the effects of the pandemic, the reason to this is that the industry still had not recovered from the crisis it faced earlier weather in 2001 after 9/11 or global financial crisis(2008), where airline revenues fell 16 per cent in 2009. It is Industry which always finds itself on the frontline when Global Disaster strikes. This is the industry that has always struggled to make consistent profits.
It is no surprise that the industry which is badly affected by the Covid-19 pandemic is the one responsible for spreading it to all around the Globe. The current situation is so bad that the whole industry is moving towards bankruptcy as their cash reserves are drying up very quickly and till date no end can be seen for this pandemic which means demand also drying up.
Now the situation is so bad that a Coordinated government and industry action is needed as soon as possible to avoid a catastrophe which can put the whole Industry into the dark. This all has not only affected the Airline companies but also the aircraft manufacturing giants like Boeing whose stock price fall by 25% and Airbus is reviewing its 2020 delivery targets. Serious of the situation can be understood by this fact that the USA which is home to the Top Airlines in the World is also feeling the heat of the crisis and is seeking up to $50 Billion in aid so that the top airlines can survive this crisis, whereas in UK Virgin Atlantic has asked the government to support the sector by making emergency credit of up to £7.5b available to the sector. This funding alone does not provide with the surety that the airlines will survive this crisis because back in 2001 when the Industry faced the similar kind of crisis and then also a $10 Billion could not save the big airlines like United Airlines from bankruptcy and now also they are facing the same situation.
Again, this Billion Dollar Industry is in crisis and due to which many airlines are going to get bankrupt and the future of thousands of employees working under them is in dark. The same can be understood by these steps which have been taken by various airlines.
- Virgin Atlantic will cut four-fifths of its flights and has asked staff to take eight weeks of unpaid leave.
- Ryanair and EasyJet are grounding most of their fleets, while BA owner IAG is to cut capacity by 75%.
- Norwegian Air has cancelled thousands of flights and will temporarily lay off more than 7,500 staff.
- Dubai’s Emirates said it had offered staff voluntary unpaid leave for the coming months.
- Virgin Airlines has asked staff to take eight weeks unpaid leave over the next three months, with the cost spread over six months’ salary.
- Scandinavian airline SAS said it would temporarily lay off up to 10,000 employees, or 90% of its workforce.
The situation is not good for our own Domestic Airlines because they all faced a very bad 2019 in comparison to Airlines all around the Globe and they will be needing more assistance from Government than ever but in current situation Government have other priorities like health and providing food security to the poor. If our airlines are waiting for any aid, then they must wait a little longer before any assistance comes from the Government for them.
Overall Coronavirus Crisis Is an Opportunity to Remake the Airline Industry from zero because the bottom for this crisis will be zero. As the situation of coronavirus will get worse the deeper the impact will be.