Should we bail out the airlines?

March 28th, 2020
Should we bail out the airlines?

Many businesses have been hit hard by the current COVID-19 crisis, and around the world airlines have temporarily and in some cases permanently shut down. There have been calls in the US for the major airlines to be bailed to the tune of $50 billion.

It's an unprecedented situation on all sides, and so I thought I'd weigh in with some thoughts on whether or not we should bail out the airlines:

Coronavirus has arrived and has all but shut down the airline business. Airlines have had to slash 50% of routes and in numerous cases have temporarily ceased operations altogether. And the fallout is enormous; as of March 5 IATA predicted global airline revenues to be down $113billion…more than the entire GDP of Ecuador, and things haven’t been getting better.

Already the industry has lost one player, Flybe in the UK. and many other airlines who were barely profitable to begin with will struggle to survive in a business where cashflow is everything.

Airline executives have already got their hands out saying that without a government bailout, they will go under which will imperil the economy which is already under massive strain due to this problem.

So the question is: Should we bail out the airlines? What do you think?

Cheers!

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