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Which are the airlines most likely to go under in the coming 3 months?

Which are the airlines most likely to go under in the coming 3 months?

Old Mar 17, 20, 12:23 am
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Which are the airlines most likely to go under in the coming 3 months?

From the BBC:
Forecasts by the research firm Centre for Aviation now predict that most airlines in the world will be bankrupt by the end of May unless they receive financial support.

Like many of you I have many thousands of dollars worth of miles spread across different airlines. I was thinking about booking flights now (say 11 months out) but obviously the airlines you'd book with would still need to exist then.
So, which of the major airlines do you feel are most immediately at risk?
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Last edited by Fliar; Mar 18, 20 at 1:43 am
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Old Mar 17, 20, 2:59 am
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Most or all of them. Currently cash outgoings are vastly in excess of cash incomings, and this isn't likely to change in the short-term absent shareholder capital injection and/or government bailout.

Fortunately airlines remain an essential service in most parts of the world so inevitably some / many / most will eventually get financial help to continue and restore normal operations when they can safely do so.
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Old Mar 17, 20, 3:30 am
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Most of the airlines impacted by travel bans in their home and bread and butter markets are going to struggle big time in the absence of government intervention of some sort or another.

I would be amazed if Norwegian makes it without a government bailout of some sort or another. Some of their flying to repatriate people to Norway may help with laying the groundwork to be included in a bailout.

Governments driving interest rates down toward zero (or even negative) may help keep some airlines alive in the more advanced economies of the world, but that kind of approach just wouldn't be possible everywhere and it only sort of works to deal with the capital costs of the equipment. But still then there is the labor and other variable costs for the airlines to also cover. Even with massive layoffs, the airlines face labor costs from the layoffs ... at least under many current circumstances.

Airbus and Boeing and their legion of suppliers are also going to get nailed by the current environment.

There is a reason that so much market capitalization has been wiped out by the decline of financial markets in the past several weeks and become more extreme in the past several days. A lot of firms and their employees are going to be struggling until there is confidence that the coronavirus situation is under control and not a great risk anymore and people get back to more historically normal behavior patterns.
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Old Mar 17, 20, 9:37 am
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Much depends upon the country of domicile of the airline in question. Some countries will spend whatever it takes to bail out their airlines, others will allow them to go bankrupt and then give them cash to keep services operating. I don't know if there are any out there which own their own fleet, rather than lease many or most of their planes, but they would be in relatively better shape, if debt is under control.

I'm not so worried about FF miles - the programs will have huge value in bringing customers back as airlines restart flying, whenever that may be.
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Old Mar 17, 20, 10:14 am
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I do not believe that global carriers with a business travel backbone will be permitted to fail. What arises may be far from what one sees now and it may be a bit harder for a carrier to justify lounges and Krug when part of the bill has been or is footed by taxpayers, but the fact is that commerce will demand it.

Leisure carriers and routes are a bit different because the government incentive is destination oriented. E.g. places where tourism generates a goodly part of the local economy will press their national governments to act.
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Old Mar 17, 20, 12:36 pm
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Originally Posted by GUWonder View Post
Airbus and Boeing and their legion of suppliers are also going to get nailed by the current environment.
Boeing way more than Airbus. Airbus has 16 billion Euros in cash reserves and spends 5.5 billion per month, so they can afford to stay afloat for a while without government backing even with customers essentially having stopped all payments.
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Old Mar 17, 20, 12:44 pm
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An IATA report referenced here suggests most airlines will run out of cash by May.
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Last edited by southlondonphil; Mar 17, 20 at 12:49 pm Reason: Unable to link to original source due to paywall/sharing limitations
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Old Mar 17, 20, 12:58 pm
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Didn't the Italian government nationalise Alitalia?
I don't think any of the big mid Eastern airlines or SQ will go under.
But I think all governments have to come together and freeze or force everyone to freeze everything. That includes the banks and leasing companies etc.
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Old Mar 17, 20, 1:38 pm
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Originally Posted by southlondonphil View Post
An IATA report referenced here suggests most airlines will run out of cash by May.
The report is painting a grim picture indeed.
It´s available in full on the IATA website here: https://www.iata.org/globalassets/ia...ity-crisis.pdf.
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Old Mar 17, 20, 4:51 pm
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I think the answer you're looking for is Norwegian.
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Old Mar 17, 20, 4:56 pm
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Wonder if Condor will survive. Hoping Lufthansa picks them up if they haven't already.
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Old Mar 17, 20, 5:19 pm
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Originally Posted by Uh Clem View Post
Wonder if Condor will survive. Hoping Lufthansa picks them up if they haven't already.
LOT Polish Airlines are (were?) in the process of buying them, subject to anti-trust approval.
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Old Mar 17, 20, 5:20 pm
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No matter what it is going to be ugly!
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Old Mar 17, 20, 6:01 pm
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Cathay Pacific? Mainland China might want to let them die so China Eastern or Air China can establish a hub.
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Old Mar 17, 20, 6:45 pm
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Originally Posted by bhomburg View Post
Boeing way more than Airbus. Airbus has 16 billion Euros in cash reserves and spends 5.5 billion per month, so they can afford to stay afloat for a while without government backing even with customers essentially having stopped all payments.
Boeing is a prime US defense contractor. The DOD will not let Boeing go under.
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