A number of airlines are in a critical condition as the COVID-19 crisis has shut down almost all air travel. Until a new international standard for flying is declared, it is not known how airlines will survive.
Air Mauritius was placed under voluntary administration, effective yesterday (April 22). Earlier this week, Virgin Australia went the same route. “Unless a white knight appears, Norwegian Airlines is also heavily exposed to going into administration,” says Linden Birns, md of Plane Talking.
He says it is impossible to predict how airlines will come out of the COVID-19 crisis because they don’t know when they will start flying again.
Many major American airlines have been through Chapter 11 bankruptcy and come out of the process prosperous and profitable, Linden says, but with a global pandemic, the future of the airline industry is in uncharted territory.
Closer to home, the prospect of airlines surviving dire financial states is even more uncertain.
“Only three airlines have gone into business rescue in the history of South Africa and there is no telling if they will come out of it,” says Linden. “Fly Blue Crane went into business rescue two years ago, and while it has ceased trading, it is not shut down in technical and legal terms. The other two airlines, SAA and SAX, can only be shut down by the authority of the Department of Public Enterprises, which still seems eager to find a solution.”
The future of the entire airline industry is dependent on health authorities around the world deciding on a standardised process for safe flying in the time of COVID-19, Linden says. “Until there is a global standard on what is required by airports at all stages of travel, we don’t know when or how the industry will come out of this.”
