All Airlines Could Be Bankrupt By May, Report Says

( – The travel industry has been decimated by the spread of the coronavirus. As travel bans have gone into place inside and outside the United States, everything from local restaurants and tourist destinations to hotels and transportation, the industry as a whole could be in for some tough times ahead.

Just how bad it could be is anyone’s guess at this point, but we did get one scary prediction Monday:

Most airlines will be bankrupt in two months if governments don’t do something to intervene.

The CAPA Centre for Aviation published a report on Monday that said:

“Coordinated government and industry action is needed — now — if catastrophe is to be avoided. Cash reserves are running down quickly as fleets are grounded, and what flights there are operate much less than half full.”

SkyTeam, Star Alliance and oneworld — which together represent almost 60 of the leading airline carriers in the world — urged government to “evaluate all possible means” to assist their industry.

One by one, airlines across the world are doing all they can to slow devastating effects the coronavirus has had on their business. On Monday, Ryanair, Europe’s largest low-cost carrier, announced it would ground almost its entire fleet in the next seven to 10 days. For April and May alone, it predicted it would reduce seat capacity by 80%, and couldn’t rule out grounding its entire fleet of 470 airplanes.

In a release, the airline said:

“In those countries where the fleet is not grounded social distancing restrictions may make flying to all intents and purposes, impractical, if not, impossible.”

Scandinavian Airlines on Sunday said, “The demand for international air travel is essentially non-existent.”

And Lufthansa, one of the largest airline groups in Europe, said it was having talks with governments about “receiving active government support should this become necessary.” Austrian Airlines, one of its subsidiaries, already announced it was suspending all flights beginning March 19.

Here in the U.S., three major carriers are reducing capacity on a grand scale. American Airlines is reducing international capacity by 75%. United will be chopping its capacity in half for April and May. Delta is reducing its capacity by 40% over the next few months, and is down to just one flight a day to five European routes.

On Monday, a trade group for the U.S. airlines asked for a $50 billion federal bailout.

The world’s largest airlines cutting the pay of senior executives and asking other employees to take voluntary unpaid leaves in a last-ditch effort to try to control the problem themselves. But even that doesn’t look like it would work.

Virgin Atlantic has asked their staff to take unpaid leave of up to two months. On Monday, the company said the aviation sector in just the United Kingdom would need government support of between $6.1 billion and $9.2 billion — in American dollars.

The airline industry in America alone employees roughly 460,000 people, most of whom earn a good salary with good benefits.

The CAPA Centre for Aviation report said while a coordinated global response is necessary to solve the problem, they didn’t expect one would happen:

“It will consist mostly of bailing out selected national airlines. If that is the default position, emerging from the crisis will be like entering a brutal battlefield, littered with casualties.”