Due to the corona virus pandemic, most airlines in the world will go bankrupt by the end of May, and only coordinated government and industry action can currently avoid the disaster, CAPA global aviation consulting firm said in a statement on Monday.
"With the effects of the corona virus and the many government responses to travel pervading our world, many airlines have probably already been bankrupted, or at least significantly violated the debt clauses," the report said.
Worldwide, airlines have announced a drastic reduction in their operations after the outbreak of the corona virus. For example, Delta Air Lines, based in Atlanta, announced on Sunday that 300 aircraft in its fleet would be grounded and that flights would be reduced by 40 percent.
The United States has suspended all tourist visas for people from the European Union, Great Britain and Ireland. The Indian government has also suspended all tourist and e-visas issued on or before March 11.
CAPA said in its Monday announcement: "Most airlines in the world will go bankrupt by the end of May 2020. Coordinated government and industrial action is now needed to avoid disasters."
The cash reserves are running low because the fleets are on the ground and "which flights there are much less than half full," he added.
"Advance bookings are far outweighed by cancellations, and every time there is a new government recommendation, we advise against stopping flying. Demand is drying up in an unprecedented manner. Normality is not yet in sight," it said.
India's largest airline, IndiGo, which has around 260 aircraft in its fleet, announced on Thursday that daily bookings have dropped 15 to 20 percent in the past few days.
The low-cost carrier said it expected its quarterly earnings to be significantly impacted by such a decline.
CAPA said that failing to coordinate the future will result in protectionism and much less competition.
"The alternative does not have to be considered. An unstructured and nationalistic result will not be the survival of the fittest."
"It will mainly consist of airlines that are most and best supported by their governments. The system will stink of nationalism. And it will not meet the needs of the world of the 21st century. That is not a prospect of a responsible government should have. " Be ready to think about it, "said the consulting firm.