- Sydney-based CAPA Center for Aviation estimates that many carriers will go bankrupt by the end of May.
- Nearly a third of the world's aircraft fleet is in the strict cash protection mode.
As many countries around the world are closing their borders, the outbreak of COVID-19 has had a significant impact on the travel industry, especially among the most notable casualties in airlines. According to the International Air Transport Association (IATA), airlines could lose a quarter-trillion dollars in revenue this year as commercial flights are paused.
Sydney-based CAPA Center for Aviation estimates that many carriers will go bankrupt by the end of May if they are unable to help and it is further predicted that half of all global airlines will be in business before the end of the year.
Bloomberg used the Z-score method developed by Edward Altman to predict bankruptcy in the 1960s, with airlines that included Pakistan International Airlines, SpiceJet, Norwegian, American Airlines, SkyWest, Airline, Asiana, including airlines are at risk. Virgin Australia, Korean Air, China Eastern and China Southern Airlines.
This list is not exhaustive. However, the analysis does not take into account government bailouts, extraordinary capital injections by shareholders, and other sources of funds. The Z score measures five variables including liquidity, solvency, profitability, leverage, and recent performance.
According to travel industry data provider Cerium, airlines own one-third of the world's planes.
In the second week of March compared to the same period last year, air traffic in the Asia-Pacific region decreased by an average of 80% to 12 major centers in the second week of March, Airport Council International Asia Pacific said.
Even accredited and well-run companies such as Singapore Airlines (SIA) cannot avoid the devastation caused by COVID-19 in this industry.
When the crisis began, SIA was the world's 15th largest airline group, serving nearly 140 locations in more than 35 countries and territories.
Earlier last week, it announced that it was reducing its rating capacity by 96% by the end of April and had ground 138 of its 147 SIA and Silk Air aircraft. Budget Assistant Scooter will stop flying 47 of its 49 aircraft.
It is in talks with aircraft manufacturers to postpone future aircraft delivery, and if agreed, it will postpone payment for those orders.
It has also announced that management staff will cut the salaries and other employees have been offered unpaid leave, including pilots who will take one week off each month. This will prevent contract employees. The initiative will affect about 10,000 employees.
Singapore has no domestic market to speak of, and SIA's business model relies on travel abroad by residents or travelers from Singapore, which is connected to its Tangi Airport. With Singapore's government banning transit for passengers on March 24, the SIA had to backtrack its operations dramatically, with travel bans imposed on almost every country in the world. ۔
After an unusual suspension of trading its shares on March 24, SIA announced a financial protection package in collaboration with its largest shareholder, state-owned investment firm Timask Holdings, which owns 55% of SIA. ۔ The financial package will include the sale of new shares of SGD 5.3 billion (US $ 3.7 billion) and the sale of SGD 9.7 million (US $ 6.8 billion) exchangeable bonds. Timask has promised to buy the remaining shares and bonds that have not been purchased.
This is the largest financing package announced by the airline following the collapse of the air travel market due to this outbreak.
This is the top of the Coronavir supplemental budget package announced Thursday ($ 3333.88 billion) by the Singapore government announced last Thursday to help Singaporeans and businessmen financially. SGD1 billion is specifically meant to help the travel and aviation industry. Affected companies can be paid up to 75% of their Singaporean workers' wages.
With India suffering a staggering 21 days due to the outbreak, its airlines are expected to suffer heavy losses as flights are canceled.
The airport's Cotton Center estimates that $ 3.3.3 to $ 3.6 billion will be made available to Indian airline industry, including airports and ground handlers, in the first quarter of 2021, ending June 30. In the middle of nowhere. It is speculated that airlines do not go beyond April 15 when the current lockdown ends. The report estimates that domestic and international traffic will decline between 30 and 50 percent annually in fiscal year 2021.
Separately, ICICI Securities, quoted by Bloomberg Quant, estimates that for the quarter ended June, Indigo and SpiceJet lost $ 30 million and $ 188 million, respectively. Will inform, if the airline is not restored by that time.
CAPA predicts that if this closure lasts for another 3 months, then only one warning that Indigo has issued could significantly reduce its cash reserves. The report states that Tata Sons may have to consolidate its two airlines expanding holdings in Asia and India and only one has to work.
The government's plan to sell its shares in Air India is likely to be delayed after the FY15. Already, due to the outbreak, the submission date for interest has been increased from 17 March to 30 April. As a result, even more cash will have to be invested in the sick airline for savings. CAPA estimates that a minimum of $ 30000 million will be required.
CAPA states in its report that to help the airline industry get out of this recession, the government will need to provide a relief package to the industry. Among the steps recommended are to help airlines postpone staff salaries, discounts or airport fees, and bring airports under the GST framework. It said the move should continue for three to six months or until the airlines can resume normalization.
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Sydney-based CAPA Center for Aviation estimates that many carriers will go bankrupt by the end of May if they are unable to help and it is further predicted that half of all global airlines will be in business before the end of the year.
Bloomberg used the Z-score method developed by Edward Altman to predict bankruptcy in the 1960s, with airlines that included Pakistan International Airlines, SpiceJet, Norwegian, American Airlines, SkyWest, Airline, Asiana, including airlines are at risk. Virgin Australia, Korean Air, China Eastern and China Southern Airlines.
This list is not exhaustive. However, the analysis does not take into account government bailouts, extraordinary capital injections by shareholders, and other sources of funds. The Z score measures five variables including liquidity, solvency, profitability, leverage, and recent performance.
According to travel industry data provider Cerium, airlines own one-third of the world's planes.
In the second week of March compared to the same period last year, air traffic in the Asia-Pacific region decreased by an average of 80% to 12 major centers in the second week of March, Airport Council International Asia Pacific said.
Even accredited and well-run companies such as Singapore Airlines (SIA) cannot avoid the devastation caused by COVID-19 in this industry.
When the crisis began, SIA was the world's 15th largest airline group, serving nearly 140 locations in more than 35 countries and territories.
Earlier last week, it announced that it was reducing its rating capacity by 96% by the end of April and had ground 138 of its 147 SIA and Silk Air aircraft. Budget Assistant Scooter will stop flying 47 of its 49 aircraft.
It is in talks with aircraft manufacturers to postpone future aircraft delivery, and if agreed, it will postpone payment for those orders.
It has also announced that management staff will cut the salaries and other employees have been offered unpaid leave, including pilots who will take one week off each month. This will prevent contract employees. The initiative will affect about 10,000 employees.
Singapore has no domestic market to speak of, and SIA's business model relies on travel abroad by residents or travelers from Singapore, which is connected to its Tangi Airport. With Singapore's government banning transit for passengers on March 24, the SIA had to backtrack its operations dramatically, with travel bans imposed on almost every country in the world. ۔
After an unusual suspension of trading its shares on March 24, SIA announced a financial protection package in collaboration with its largest shareholder, state-owned investment firm Timask Holdings, which owns 55% of SIA. ۔ The financial package will include the sale of new shares of SGD 5.3 billion (US $ 3.7 billion) and the sale of SGD 9.7 million (US $ 6.8 billion) exchangeable bonds. Timask has promised to buy the remaining shares and bonds that have not been purchased.
This is the largest financing package announced by the airline following the collapse of the air travel market due to this outbreak.
This is the top of the Coronavir supplemental budget package announced Thursday ($ 3333.88 billion) by the Singapore government announced last Thursday to help Singaporeans and businessmen financially. SGD1 billion is specifically meant to help the travel and aviation industry. Affected companies can be paid up to 75% of their Singaporean workers' wages.
With India suffering a staggering 21 days due to the outbreak, its airlines are expected to suffer heavy losses as flights are canceled.
The airport's Cotton Center estimates that $ 3.3.3 to $ 3.6 billion will be made available to Indian airline industry, including airports and ground handlers, in the first quarter of 2021, ending June 30. In the middle of nowhere. It is speculated that airlines do not go beyond April 15 when the current lockdown ends. The report estimates that domestic and international traffic will decline between 30 and 50 percent annually in fiscal year 2021.
Separately, ICICI Securities, quoted by Bloomberg Quant, estimates that for the quarter ended June, Indigo and SpiceJet lost $ 30 million and $ 188 million, respectively. Will inform, if the airline is not restored by that time.
CAPA predicts that if this closure lasts for another 3 months, then only one warning that Indigo has issued could significantly reduce its cash reserves. The report states that Tata Sons may have to consolidate its two airlines expanding holdings in Asia and India and only one has to work.
The government's plan to sell its shares in Air India is likely to be delayed after the FY15. Already, due to the outbreak, the submission date for interest has been increased from 17 March to 30 April. As a result, even more cash will have to be invested in the sick airline for savings. CAPA estimates that a minimum of $ 30000 million will be required.
CAPA states in its report that to help the airline industry get out of this recession, the government will need to provide a relief package to the industry. Among the steps recommended are to help airlines postpone staff salaries, discounts or airport fees, and bring airports under the GST framework. It said the move should continue for three to six months or until the airlines can resume normalization.
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