Few sectors have been hit harder by the economic fallout of the pandemic than the airline industry. Asia is expected to see the steepest drop-off in passenger revenue, with airlines in the region forecast to lose an estimated $113 billion this year. Air traffic there plunged 98% in April compared to the year before.
"Governments need to ensure that airlines have sufficient cash flow to tide them over this period," Conrad Clifford, regional vice president for Asia-Pacific for IATA, said in an April 3 statement.
Clifford called for "direct financial support" from governments to airlines, loan facilitation, and tax and levy waives. "[Countries] need to act now-and urgently-before it is too late."
Several governments have heeded that advice, rushing to help cash-strapped carriers; other have so far failed to act, leaving some airlines to flounder.
On Tuesday, the Hong Kong government announced it will spend almost $4 billion to bail out the city's flagship airline, Cathay Pacific. The airline had a net loss of $581 million in the first four months of 2020. Travel restrictions and border closures have battered Cathay particularly badly since, unlike other regions, it has no domestic flight routes to restart ahead of international borders opening.
The coronavirus was a second crisis for the embattled Cathay. It saw its revenue drop 3.7% year-on-year in 2019 after months of protests in Hong Kong, which prompted Cathay employee strikes, cancelled flights, and several countries issuing travel warnings for Hong Kong.
To get itself through the downturn, Singapore Airlines announced on Monday that it has raised more than $7 billion from credit lines and a rights issue, with backing from Singapore government state fund Temasek Holdings, which owns 55% of the airline. Temasek also announced a $13.3 billion funding package for Singapore Airlines in late March.
Last month, the Thai government said it would submit a rehabilitation plan-similar to filing Chapter 11 bankruptcy in the U.S.-for Thai Airways, Thailand's national carrier, eschewing a previous plan to loan the airline $1.81 billion.
Thai Airways could take as long as seven years to complete rehabilitation, its legal advisor said on Monday. The carrier had already been struggling financially before the coronavirus hit and grounded its entire fleet on April 4, save a few repatriation flights.
Malaysia-based Air Asia Group, Southeast Asia's...