The global airline industry, struggling as the world is on lockdown with the spreading coronavirus, is increasingly turning to governments for financial aid.
Without it, many of the airlines fear they’ll run out of money completely without any more coming in, as travel spirals down. In the U.K., nonessential travel has been advised against for the next month. In the U.S., President Donald Trump blocked travel from parts of Europe in response to the virus. And many customers have simply stopped traveling due to social distancing expectations to try and stave off the disease.
The International Air Transport Association (IATA), the airlines’ main trade body, said it will need around $200 billion in support to stay afloat. IATA said there were only a select few airlines that had driven profitability so much that they’d be able to weather the storm of the virus — many would be in dire straits.
Boeing also called for $60 billion to help manufacturers through these times. The company said the $60 billion would go toward paying workers and keeping its supply chain of 2.5 million jobs and 17,000 contractors afloat. Boeing said a blend of public support and loan guarantees would perhaps be the best solution.
U.S. airlines have said they’ll need $50 billion in bailout funds.
In response to the virus outbreak, which has spread across the globe over the past month and crippled the economy of countless industries, airline companies have had to ground flights and lay off staff. The crisis, according to IATA and Boeing, is worse than others the companies have faced in the past.
The industry has also had to reassess its previous worst-case guess of a $113 billion loss. Now, after the turmoil in the U.S. in the wake of the virus, the industry thinks it will be much worse, expecting to have a revised bottom estimate by next week.
Moody’s has also lowered the credit ratings for many companies, cutting low cost carrier easyJet down to a Baa2 and de-ranking German giant Lufthansa down to Baa1. British Airways was also under review for its own Baa3 rating, along with parent company IAG.