Airlines are not out of the woods yet and more carriers are expected to collapse with the anticipation of the second wave of the COVID-19 pandemic, an expert has cautioned.
Qatar Airways CEO Akbar Al Baker told CNBC on Thursday that collapse and bailout of airlines will be the norm in the coming days. And his assessment of things is brural.
“Because of the second wave, I think it is … even more severe than in the first wave.” There will soon be other bailouts in Europe, there will be other collapses around the world,” he offered.
Mr Al Baker was not lenient even on his own Qatar Airways which has already posted a record loss of $1.9 billion for the 2019-2020 financial year, due to both the pandemic and the ongoing blockade by a group of Gulf Arab states led by Saudi Arabia.
“I need to tell you that our losses will continue because every single airline in the world will continue to lose money because there are no more passengers to carry,” he warned.
Qatar Airways has been provided with a $2 billion bailout by its owner, the gas-rich Qatari state.
Al Baker’s analysis comes at a time when the International Air Transport Association (IATA) has warned that airline industry will burn through $77 billion in cash during the second half of 2020 (almost $13 billion/month or $300,000 per minute), despite the restart of operations.
And the outlook is grim according to IATA: The airline industry is not expected to turn cash positive until 2022.
And in what could suggest tough times ahead for airlines, Boeing has slashed its expectations for global passenger jet demand over the next decade by 11 per cent, representing a loss to the industry of an estimated $200bn in potential revenue, as airlines shrink fleets and accelerate the retirement of older aircraft.
But for Al Baker, will have to play a major role in supporting airlines to stay afloat and navigate the chaollenges brought about by the Covid-19 pandemic.
“Airlines need to be supported by their governments for the time being, if they want their airlines to survive,” he said.