Due to the fast spreading corona virus worldwide, the most impact is going to be on the airlines and most of the airlines may go bankrupt by the end of the May. The Center for Asia Pacific Aviation, the premier advisory committee of airlines around the world, has expressed such fears. CAPA has said that this catastrophe can be avoided only if all governments unite and try to reduce the damage of the airlines industry. In a statement released on Monday 16 March, CAPA stated that, “Airlines are constantly short of money, cash reserves are shrinking as most aircraft are grounded, and those flying are Less than half the passengers. The way governments around the world are imposing travel restrictions, it is feared that many airlines have reached the stage of technical bankruptcy or may fail to repay their debts.
Significantly, the Corona virus has spread all over the world, starting from China, and at least 6,000 people have died because of Corona. At the same time, more than one and a half lakh people have been found infected by it. In India too, at least two people have died officially and more than 120 people have been found infected.
CAPA’s South Asia CEO Kapil Kaul told a Business News website that, “The airlines whose balance sheet is weak in India will have the highest impact which will depend on the spread of corona virus in India.” He said, “Recently the government has reduced the tax on the fuel of the aircraft, but it is difficult to provide much help to compensate for the damage caused by the corona virus.”
Keep in mind that on 14 March, Civil Aviation Minister Hardeep Puri had indicated that the fuel of the aircraft could be brought under the purview of GST.
Apart from this, India has suspended the visa for people coming to India from abroad till 15 April, and has also asked people to limit travel within and outside the country. The government has said that people travel only if there is any urgency.
Many other countries have taken similar steps. Several flights have been suspended in the Middle East including Qatar and the UAE. Bookings of all Indian airlines including IndiGo, Vistara and SpiceJet had already started declining. Reports suggest that up to 50 per cent of airlines can fly aircraft.
CAPA has criticized the government for such travel advice. CAPA states that, “Although the government is concerned about health challenges, it should have coordinated efforts in the wake of industry.” All the tenths should try to find solutions which are in everyone’s interest. But the action is expected to increase losses without taking steps in confidence to industries.
CAPA cited the example of US President Donald Trump, who banned travel from European countries without consulting European countries. CAPA stated that, “Before this widespread health attack is dealt with, it is imperative that airlines around the world, ICAO, European Union, IATA, Regional Aviation Association and major aviation countries work in mutual cooperation so that In this century, social and economic needs of the world can be met.
Meanwhile, the World Travel and Tourism Council WTTC has said that if the threat of corona virus continues, at least 5 crore people will be threatened on their job.