Covid-19: Moody’s says global airlines may more than halve capacity in Q2 2020

NEW DELHI: Global airlines are likely to cut capacity by 40-60% year-on-year for the second quarter of 2020 and more than 75% in some cases as the aviation sector takes a big hit due to the coronavirus outbreak, according to rating agency Moody’s Investors Service.

“On a full-year basis, we expect global industry capacity to fall 25% to 35%, assuming the spread of the virus slows by the end of June and, subsequently, passenger demand returns,” it added.

While large airlines have adequate liquidity “to manage through a fairly significant short-term disruption through June, and a continuing but more moderate disruption through the third quarter”, the rating agency said smaller and less liquid airlines “will be more exposed, and there is potential for some airlines to collapse within a short period without additional support from shareholders and central governments.”