Which airlines will remain on the tarmac after the crisis?

The British company Flybe will go down in history as the first airborne victim of the coronaviruswith her disappearance at the beginning of March. Unfortunately, it will probably not be the only one. The International Air Transport Association (IATA), the lobbies and other representatives of the industry are continually remember that aviation is one of the sectors most affected immediately.

IATA said it expected the global airline industry to need 150 to 200 billion dollars financial assistance to survive the pandemic. According to Alexandre de Juniac, Director General of IATA, the industry's losses could reach 40 billion dollars in 2020.

IATA's Chief Economist, Brian Pearce, pointed out that airlines are cash-strapped, saying that a typical carrier only has an average of two months' cash in reserve.

While the major national airlines are probably assured of benefiting from the financial support from the State - likeAlitalia which the government has just announced is to be renationalised - and airlines such as Asiana and Korean Air in Korea and El Al in Israel are particularly hard hit by the total closure of their airspace. But they will have to rely on the intervention of their respective governments. As are Scandinavian Airlines (SAS) and Tap Air Portugal in Europe, and Air India, Malaysia Airlines and Thai Airways International in Asia.

There is, however, one unknown factor in the Middle East with the Abu Dhabi carrier, Etihadin the middle turnaround in open competition with Emirates in Dubai. There has been a lot of talk about a reconciliation between the two carriersa rapprochement regularly denied by the two protagonists. However, such a solution would make more sense than ever if the governments manage to put aside their natural national pride...

But what about secondary or low-cost carriers ? Some companies were already financially very fragile and it is reasonable to think that they will have difficulty surviving, unless there is a massive influx of funds. This has already been a major trend in Europe, where we have seen carriers disappear in recent months without the State coming to their rescue: Thomas Cook Airlines and Flybe in the United Kingdom, Adria Airways in Slovenia and Air Italy.

Today, all eyes are on Norwegianone of Europe's largest airline operators, with a long-haul base in Paris. For at least two years the carrier has been in a fragile financial situation and according to the experts most exposed to the fall in traffic. The carrier has closed 85% lines and dismissed 90% of its staff. Some 3,000 of the airline's flights will be cancelled between now and June. The company's CEO Jacob Schram said that he had discussed how the Norwegian government could support the company, which recognises that it plays a vital role in air transport in the country.

But Norwegian is really walking a tightrope. Jacob Schram believes that the airline's survival is now measured in weeks rather than months. One solution would be to find an airline buyer with strong backbones. IAG had expressed an interest But the coronavirus situation has changed the situation, leaving the major carriers financially weakened. IAG is said to have little money in its coffers...

In France, the most vulnerable carrier is The Companywhose business is limited to flights between Paris Orly and the United States. With the closure of American airspace, the airline is losing 100% of its traffic. It's hard to survive without government intervention.

In both the United States and China, the consolidation of the air transport sector over the last few years has given the industry a better chance of reaching its full potential. resilience to the effects of the coronavirus. But other mergers could also emerge. This has already been announced by China, which wants to dismantle Hainan Airlines and divide its assets between the three airline giants, China Southern, China Eastern and Air China. The latter has already declared itself ready to financially support Hong Kong Airlines, a subsidiary of HNA - the very owner of Hainan Airlines.

In the United States, the Trump administration has promised to help its airlines get through the crisis. In particular, the authorities could encourage new mergers and accede to the request from local carriers to put on the table 50 billion in financial aid.

The most vulnerable companies include Jetblue. In a press release, the carrier confessed that instead of the $22 million a month in bookings and ancillary services, Jetblue took in less than $4 million a day on average in March, while granting more than $20 million a day in credits to customers for cancelled bookings. The company could join forces with another US carrier to preserve its business.

Another carrier in real danger: Aeromexico whose available funds at the beginning of March amounted to just $370 million and whose debt was six times its equity. By comparison, Southwest Airlines has cash of 4.1 billion dollars and debt representing 0.4 times its equity...

We can therefore expect a new phase of consolidation in the air transport industry, with fewer airlines and less dispersed competition.

In Europe, Airlines for Europe (A4E) and European Regions Airline Association (ERA) have asked the European Union's transport ministers to introduce a " complete set of measures "They are calling for air traffic control charges and aviation taxes to be transferred to EU level. They are calling for air traffic control charges and aeronautical taxes to be deferred at EU level, and for direct support from EU funds through guarantees or credit facilities, as well as an extension of the derogation abolishing slots until the end of October with the introduction of winter schedules. The EU Presidency has said it is in favour...