Massive Layoffs and Bankruptcy Declarations Hit Air Transport Sector
The coronavirus pandemic has had its toll across the world not only in terms of the deaths, but the impact on the world’s economy. The impact has been distressing and would take long for the world to pick up. The global economy is crawling, and many countries are taking life-saving measures to insulate their economies from total collapse.
One of the sectors severely hampered that needs dire palliative measures is the transport sector, with several airliners threatening to, or downsizing its employees to the barest minimum.
Virgin Atlantic, a British Airliner in a letter to its employees expressed the need for government support to safeguard jobs in the face of what they describe as, “uncertainty surrounding travel today and not knowing how long the planes will be grounded.”
It is speculated that the company envisages “firing” more than 3000 workers including 600 pilots. To shield assets in the U. Virgin Australia has filed for bankruptcy since the company was denied bail out by the Australia government.
Air Mauritius has also gone into administration and Sattar Hajee Abdoula and Arvindsingh K Gokhool have been appointed administrators to rescue the company from total bankruptcy.
South African Airways on its part has entered bankruptcy protection because it has run out of liquidity and can no longer operate as usual. Elsewhere in Finland, 12 planes were returned and about 2,400 people terminated citing low business turnout. Many more Airliners across the globe have taken drastic measures to save the companies.
Close to 60 new aircraft are currently at the airbus warehouse with no buyers in view. Instead, orders of new aircraft have been canceled including A350s.
It is forecast that by September if things do not improve, a minimum of 8000 planes would be grounded costing the jobs of more than 90.000 pilots worldwide.
As of now, the only hope to keep these jobs and the world economy from the downward trend depends very much on how speedily the highly infectious covid-19 pandemic is contained.
In the United States of America, the car rental giant Hertz Global Holdings Inc., filed for bankruptcy protection Friday May 22 as its debt level rose to over $19 billion. The company reports that nearly 700,000 in its garages have been largely idle because of the coronavirus.
Despite the flicker of hope across the world as countries make "baby" steps to stabilizing or flattening the curve and slowly reopening their economies, the behaviour of the virus is still very erratic causing fears and uncertainty of a resurgence. This fear is propelled by the irresponsible way some countries are reopening, shunning scientific advice from experts.
2020 will go down as a sad year for the 100 years old aviation industry. The effect of the covid19 on lives and the economy would put in place a new world order. The US President, Donald Trump has flaunted the idea that someone needs to pay for the chaos, lives, and the economic cost of covid19. Investigations into how, when, and what happened to unleash the “monster” into the world are already has been ordered.