Tuesday, March 17, 2020

About 75% airlines globally, including Indians, set to face liquidity crisis: IATA

New Delhi: The International Air Transport Association (IATA) has today said that about 75% of the airlines across the globe, including airlines in India, are set to face liquidity crisis due to flight cancellations, as governments try to contain the spread of COVID-19 virus in their respective country.
“There are a large number of fixed cost that airlines have to pay, whether they operate flights or not. In the beginning of this year, about 75% of the airlines had less than three months of cash to cover their fixed cost. Airlines are looking at liquidity crisis due to recent situation arisen due to cancellations across the globe,” Said Brian Pearce, chief economist at IATA.
He added that airlines, excluding to 30 profitable airlines globally, were in a fragile position and the situation will worsen further for them.
No Indian airlines have a place in the top 30 profit making airlines globally and the situation is set to impact the liquidity situation of Indian airlines too. Among Indian airlines, IndiGo is the most profitable but was not in the list of profitable airlines in December due to losses in the second quarter of the current fiscal.
Covid-19, which has infected over 182,000 people across the globe and led to deaths of over 7,000, has been declared a pandemic by the WHO and Europe has been declared the new epicentre of the Virus. As part of its attempt to stop the virus from entering their country, the government across the world have banned people coming from the affected countries. India has also banned a large number of countries, including countries in Europe, the UK and countries in Southeast Asia.
17/03/20 Mihir Mishra/Economic Times
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