The aviation industry faces an acute danger. As passenger numbers have crashed and the government has imposed travel bans, the spread of coronavirus may lead to many airlines going bankrupt by as early as May-end.
The aviation industry faces an acute danger in the wake of rising cases of coronavirus across the globe. As passenger numbers have crashed and the government has imposed travel bans, the spread of coronavirus may lead to many airlines going bankrupt by as early as May-end, according to a report by an industry advisor. “Cash reserves are running down quickly as fleets are grounded and what flights there are operate much less than half full,” CAPA said in a statement on March 16, PTI reported. The dreadful fate that the airlines are headed to can be avoided only if governments come together and coordinate to limit further damage, the report added. Meanwhile, UK’s leading airline Flybe has already collapsed due to a demand slump owing to coronavirus.
The centre’s decision to cancel all valid visas in India is likely to impact the passenger load and it will also have a cascading effect on tourism and the hotel industry as well. With foreign airlines reducing operations, aviation, hotel and tourism industry are expected to sustain a blow to the tune of Rs 8,500 crore, the Indian Association of Tour Operators said last week, The Indian Express reported. Indian airlines, such as IndiGo, Vistara and SpiceJet, have already seen fewer number of bookings and a decline in passenger numbers. Earlier, another aviation industry organisation had said that the decline in passenger growth numbers witnessed in January 2020 is merely the “tip of the iceberg” and passenger growth will take a further hit.
Other industries are also getting impacted as governments have introduced temporary lockdown due to coronavirus. In India, the center suspended tourist visas till 15 April and several states have announced a temporary shutdown of gyms, shopping malls, schools and swimming pools. The China-originated virus has killed over 6,500 people so far with a total number of confirmed cases crossing over 1,60,000. Back home, the virus has caused two deaths, with over 110 reported cases.