With airlines facing a bleak winter and a full recovery seen only in 2024, more airlines are likely to collapse
- Bookings in November and December have declined 81 per cent and 78 per cent year on year respectively, data from airline consultancy CTAIRA shows
- Financial help from governments could limit the number of airline failures, says aviation analyst Brendan Sobie
Demand for air travel is lagging even the most pessimistic of recovery scenarios, which has been made worse by the resurgence of Covid-19 pandemic in Europe and the US, Cirium, a London-based travel data and analytics firm, said this week. The industry’s recovery to the level seen in 2019 could be delayed to 2024 from the previous forecast of as early as the second quarter of 2021, it added.
Meanwhile, forward bookings in November and December, have declined 81 per cent and 78 per cent year on year respectively, according to data from CTAIRA, a UK-based aviation consultancy.
“We are going to see more airline failures in the winter,” said Chris Tarry, founder of CTAIRA. He said that this was because of the lack of revenue during the important summer period when demand is at its highest, which has been exacerbated by the deteriorating demand during the slack winter months.
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Airlines are being besieged by various headwinds, including high aircraft leasing expenses and fluctuating oil prices. Additionally, debt level has been rising and the need for raising capital is urgent as many airlines lack sufficient cash to survive, observers said.
Around 43 commercial carriers have ceased or suspended operation since the start of this year, according to Cirium.