COVID-19 downturn: Airlines try to keep their distance from bankruptcy

The global airline industry has never had it so bad. Not even after the 9/11 terrorist attacks. Airlines could lose a quarter of a trillion dollars in revenue this year, according to the IATA, as travel comes to a standstill with countries locked down to fight the coronavirus. Most carriers will go bankrupt by the end of May if they can’t find support, Sydney-based CAPA Centre for Aviation said last week. Which airlines are most at risk? Like the virus, the crisis is indiscriminate, affecting everyone from budget operators to national flag carriers. Aircraft manufacturers and their suppliers also are under immense pressure. Using the Z-score method developed by Edward Altman in the 1960s to predict bankruptcies, Bloomberg News filtered out listed commercial airlines to identify the ones most at risk of going bust. The calculations don’t take into account government bailouts or other funding sources that could help keep operators alive. While the list is concentrated in Asia, mostly due to high debt levels, European carriers aren’t immune. According to Altman, scores of 1.8 or below indicate a risk of bankruptcy and scores over 3 suggest sound footing. Indebted low-cost carrier Norwegian Air Shuttle ASA and Air France-KLM both landed below the threshold, as did American Airlines Group and SkyWest. Story has more details.<br/>