Which airlines are most in danger of going under during the worldwide travel slump amid the global coronavirus pandemic?
- Using the Z-score method developed by Edward Altman in the 1960s to predict bankruptcies, Bloomberg filtered out listed commercial airlines to identify the ones most at risk of going bust, based on available data
- The calculations don’t take into account government bailouts or other funding sources that could help keep operators alive
The global airline industry has never had it so bad. Not even after the 9/11 terrorist attacks.
Which airlines are most at risk? Like the virus, the crisis is indiscriminate, affecting everyone from budget operators to national flag carriers. Aircraft manufacturers and their suppliers also are under immense pressure, with Boeing calling for billions of dollars in state support and Airbus extending credit lines and cancelling its dividend.
Using the Z-score method developed by Edward Altman in the 1960s to predict bankruptcies, Bloomberg News filtered out listed commercial airlines to identify the ones most at risk of going bust, based on available data. The calculations don’t take into account government bailouts or other funding sources that could help keep operators alive.
According to Altman, scores of 1.8 or below indicate a risk of bankruptcy and scores over 3 suggest sound footing. Indebted low-cost carrier Norwegian Air Shuttle and Air France-KLM both landed below the threshold, as did American Airlines Group and SkyWest.