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What Happens to Airlines Failures When Crisis Subsides?


One of the most striking aspects of the deepest and most lasting crisis ever to commercial air transport is the bankruptcy of many airlines to date.


However, relatively few airline failures so far are not indicative of the health of the sector. On the other hand. This reflects how large the crisis means countries are forced to introduce direct and indirect financial measures to help support airlines get through the crisis.


If the state is reluctant or unable to step in, a formal restructuring process will be launched to try to maintain the necessary breathing space. Several other operators have undertaken major restructuring projects. But outside the formal creditors protection process


To some extent, the crisis has resulted in airlines almost disrupting their pre-epidemic health conditions. Only when support measures and new normalcy are lifted - whatever it may be - the health of the airline will be clear.


In this case, intuitively it might be just when the chances of air travel improved that other airlines began to fail.


A slower recovery rate can mean an environment with fewer passengers. Some airlines may have done enough to overcome the crisis in a semi-hibernation state, others may have succeeded in seizing the opportunity. But many will not be saved without further assistance.


Over the years, the government has shown reluctance to shut down the airline's life support service. But this is a crisis like no other. In the past, decisions to support sick airlines were often separated - the choice between intervention or the political repercussions that plague airlines and large corporations.


In a post-epidemic climate, states may not have the resources to fund follow-up aviation aid, or they may find they have the right choice about the industry they need to save. In this case, a profit history or at least the return on investment will be important to consider. Many airline brands, despite their long history But there was no consistent profit record.


Industry partners, especially aircraft charterers and manufacturers, have played a part in supporting struggling airlines. Of course, this is in their own interests - they want airline customers on the other side of the crisis to fly their assets. But the lessor and the producer are business. They also have to choose which airlines will serve them when the normal business environment returns.


Stronger airlines could enter the private equity or financial markets to generate additional liquidity through the crisis. Show a better balance sheet and the investment return that industry share can provide during good times. This suggests that some people will survive without significant state support.


Other people tend to benefit from the situation as well. Those with access to a strong domestic sector to return, or those who operate in a better epidemic-controlled market, or a greater national desire to support air traffic reconstruction.


But when plugin status support has been removed and panic settings, things can happen pretty quickly. In Europe, after the financial crisis a decade ago, Malev and Spanair fell within a week. The operator has 90 years in the flight between them, although with limited profits.


It cannot be denied that more established airline brands have been lost due to the crisis. How many completely different questions and for how long? Many brands can survive on a smaller scale or be part of a wider segment depending on the entrepreneur's better taste or ability to be a buyer.


But history shows that it took a lot for the airline brand to disappear altogether. And due to a recent interest in the Flybe show's debut, or an ongoing effort to revitalize Jet Airways, even some of the missing brands may make a comeback.

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