Global airlines are fast running out of cash after cutting capacity by 90% or even grounding entire fleets due to the broad travel restrictions to contain the spread of the coronavirus, calling into question the survival of several firms.
The outbreak of the flu-like virus has wiped 41%, or $157 billion, off the share value of the world’s 116 listed airlines, with many using up their cash so fast they can now cover less than two months of expenses, a Reuters analysis showed.
The industry’s main global body, the International Air Transport Association (IATA), estimates the sector needs up to $200 billion in government support to help airlines survive.
Shares in US airlines fell sharply on Wednesday after Washington proposed a rescue package of $50 billion in loans, but no grants as the industry had requested, to help address the financial impact from the deepening coronavirus crisis.
The Trump administration’s lending proposal would require airlines to maintain a certain amount of service and limit increases in executive compensation until the loans are repaid.
In their push for aid, airlines have touted the role their services will play in revamping the global economy.
“When this pandemic passes – and it will – air travel will play a major role in getting life back to normal and supporting economic recovery. We are going to need significant government help to do that,” JetBlue Airways Chief Executive Robin Hayes and President Joanna Geraghty said in a memo on Wednesday.