Skift Take
These charts paint a dire picture, as of March 17. "But one big difference between now and post-9/11 is this: U.S. airlines can borrow money," as Skift Airline Weekly Senior Analyst Jay Shabat has noted. "Last time the banks and other lenders were like, 'No way, not giving those airlines a dime.'"
Global airlines are fast running out of cash after cutting capacity by 90% or even grounding entire fleets due to the broad travel restrictions to contain the spread of the coronavirus, calling into question the survival of several firms.
The outbreak of the flu-like virus has wiped 41 percent, or $157 billion, off the share value of the world’s 116 listed airlines, with many using up their cash so fast they can now cover less than two months of expenses, a Reuters analysis showed.
The industry’s main global body, the International Air Transport Association (IATA), estimates the sector needs up to $200 billion in government support to help airlines survive. (More: Why U.S. Airlines Will Need to Lose the Hubris After We Bail Them Out.)
The following charts show airlines’ liquidity ratios, and their changes in cash and debt levels against core earnings. (Right-click your mouse for bigger views in a new browser tab.)
Above: Airlines’ change in cash levels is as of March 17, 2020. Source: Reuters Right-click your mouse for a bigger view.
Above: Source: Reuters Right-click your mouse for a bigger view.
Above: Airline firms’ net debt-to-earnings before interest, taxes, and depreciation as a measure, as of March 17, 2020. Source: Reuters Right-click your mouse for a bigger view.
Above: Airlines cash on days by region as of March 17, 2020. Source: Reuters. Right-click your mouse for a bigger view.
Above: Airline firms’ net-debt-to-equity ratios using earnings before interest, taxes, and depreciation as a measure, as of March 17, 2020. Source: Reuters. Right-click your mouse for a bigger view.
Above: Airline market capitalizations as of March 17, 2020. Source: Reuters
Reporting By Patturaja Murugaboopathy; Additional Reporting by Gaurav Dogra in Bengaluru; Editing by Miyoung Kim and Tom Hogue
Copyright (2020) Thomson Reuters. Click for restrictions
This article was written by Patturaja Murugaboopathy from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
Subscribe to Skift Pro
Subscribe to Skift Pro to get unlimited access to stories like these ($30/month)
Subscribe NowTags: airline innovation, airlines, coronavirus
Photo credit: A Latam Airlines Airbus A350. The airline group, which Delta has a 20 percent stake in, is one of many that are struggling. BriYYZ / Latam