The COVID-19 pandemic has engulfed the entire nation. Not only this virus is hurting humans health but also their pockets. For instance the effect of coronavirus on the stock market. To curb the infections most of the countries have banned travelling and the step is costing at a huge level to the aviation industry.
A global aviation firm CAPA on Monday said that due to the novel virus, most airlines in the world will be bankrupt by the end of May and only a coordinated government and industry action right now can avoid the trouble.
CAPA said, "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."
Atlanta-based Delta Air Lines stated on Sunday that it would be grounding 300 aircraft in its fleet and reduce flights by 40 per cent.
The US has suspended all tourist visas for people belonging to the European Union, the UK and Ireland. The Indian government has suspended all tourist visas and e-visas granted on or before March 11 as well.
CAPA, in its note on Monday, said, "By the end of May-2020, most airlines in the world will be bankrupt. Coordinated government and industry action is needed - now - if catastrophe is to be avoided."
Cash reserves are declining quickly as flights are not flying and "what flights there are operate much less than half full", it added.
Also Read: SEBI 'prepared' to take action as markets rattled on corona crisis
"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," it said.
India's largest airline IndiGoNSE -2.04 % -- which has around 260 planes in its fleet -- said on Thursday that it has seen a decline of 15-20 per cent in daily bookings in the last few days.