Monday, September 07, 2020

Has Malaysia's AirAsia Found The Blueprint For Airlines To Survive COVID-19?

Singapore: Malaysia's AirAsia is hoping a "super app" they are developing during the Covid 19-enforced travel hiatus, will help it recover from the devastation to its business caused by the coronavirus. This was revealed by CEO and founder Tony Fernandes in an interview with the BBC published on August 31.
As sobering news continues to flow in from the global airline industry, has AirAsia found the elixir that will alleviate the cash flow problems faced by carriers all over the world?
When the pandemic struck and cross border travel barriers came up, it was almost certain that travel-related businesses -- hotels, airlines, airports, travel agents, tour operators, tourist destinations, travel booking websites -- were going to be among those most severely impacted.
Airlines all over the world have been losing revenue and shedding employees. They are facing a future where they expect to mount fewer flights because of reduced travel demand. Many airlines are projected to be smaller and leaner organisations than they were in pre-COVID times at least in the foreseeable future.
Last week, Virgin Atlantic said it is planning to cut another 1,150 jobs subject to union consultation. This is on top of the over 3,500 jobs already being phased out from the 10,000 employees it had at the start of the year. The carrier had earlier announced that it had obtained court approval from the UK and US for its 1.22 billion pounds (USD 1.62 billion) rescue package which it hopes will secure its future for another 18 months.
The package which had already been approved by creditors includes 600 million pounds (USD 797 million) of support from the airline's owners, Richard Branson's Virgin Group and Delta Air Lines, 450 million pounds of deferred payments to creditors and 170 million pounds of financing from US-based Davidson Kempner Capital Management.
07/09/20 ANI/Business World
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