As soon as COVID-19 made its way to different countries, they all decided to minimize the travel activities. Many countries banned international travel, which caused a lot of misfortune for the airlines.
Most of the airline’s laid-off employees grounded their operations and did cost-cutting in every possible way. IATA estimates that airlines globally will lose at least $314 billion due to the outbreak.
For many airlines, it was not easy to keep up the business. As international travel was ban and only a few passengers were traveling at this time. Many travelers canceled their flights, as they were not sure if it was safe to travel at this hour.
With the airline operations at standstill, they could not cope up with the situation and announced bankruptcy. Recent many airlines announced that they couldn’t pay their debts. Airlines that have filed bankruptcy are Flybe, Trans States, Ravn Airlines, Compass Airlines, Virgin Australia, Air Mauritius, South African, Avianca Airlines, Thai Airways.
Although President Donald Trump has signed the bill that includes $58 billion in aid for airlines. But many airlines will have stopped to see the daylight by then. The bill is split in $29 billion for payroll grants and $29 billion for loans to airlines. It is likely that other airlines, both in the US and abroad, will be forced to consolidate or shut down, International Air Transport Association (IATA) director-general Alexandre de Juniac has warned.
The Trans States Airline was already on the verge of closing down. But the COVID-19 made that happen a little earlier. The impact of the virus affecting its business operations is majorly responsible for the earl shutdown.
Compass Airlines another regional US airline will be closed. Compass operates flights for American Airlines and with the sharp decline in domestic travel, the need for the carrier is not felt.
Aviance is one of the oldest airlines in Latin America. The operations have been grounded since March as the company had lost 80% of its revenue under the pandemic.
We may see a better result once the restrictions due to the pandemic have been lifted. These are perhaps the most challenging times for airlines across the globe. The governments and the investor will have to come up with a strategic plan. Or else the wheels in the industry will come to a standstill.