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On Average, US Airlines Have Enough Cash to Survive 8 Months

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Time continues to be of the essence for virtually every business affected by the global coronavirus pandemic, and especially critical for a U.S. aviation industry that is facing the potential loss of several whole airlines.

According to a new report issued by financial services firm Raymond James and summarized by coronavirus/” target=”_blank” rel=”nofollow noopener noreferrer”>the aviation blog The Points Guy, domestic carriers have, on average, enough cash on hand to survive about eight months before they face bankruptcy or, worse, insolvency.

For some, it’s a little longer. Regional carrier SkyWest can go almost a full year with what it has in the bank.

For others, it’s a more pressing issue. According to Raymond James, American has enough cash to only last about 4.8 months. American is carrying the most debt among U.S. airlines.

Still, it’s better than the global average.

The International Air Transport Association (IATA) estimates global carriers have an average of three months of cash on hand. The Points Guy noted that IATA has previously said that nearly half of airlines could collapse or consolidate without government support.

“At times like this, it’s actually balance sheets that are critical to survival,” said IATA chief economist Brian Pearce during a press briefing in March.

What airlines need is revenue, but until the virus is completely obliterated, it appears that demand for travel will continue to be decreased. The Raymond James estimates do not include monies from the CARES Act, the stimulus package signed by President Trump last month that includes $25 billion in grants for airlines.

Here are the Raymond James estimates for each airline:

—SkyWest: 11.8 months of implied cash on hand

—Allegiant: 10.6 months

—Southwest: 9.4 months

—Spirit: 8.8 months

—JetBlue: 8.7 months

—Alaska: 6.6 months

—Mesa: 6.3 months

—Delta: 6.2 months

—United: 5.7 months

—American: 4.8 months

Raymond James calculated “implied months of cash on hand” by analyzing each carriers’ cash and credit reserves, and estimated cash burn. The calculations do not include any possible government funds from the CARES Act.

This post was published by our news partner: TravelPulse.com | Article Source

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Emirates Announces Firing Employees Amid the Pandemic

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Emirates Airline, the last holdout among the Gulf region‘s three major East-West carriers in retaining its workforce announced on May 31, 2020, that it had fired an undisclosed number of employees, due to the near-shutdown of global air travel amid COVID-19.

The other two—Abu Dhabi’s Etihad and Doha-based Qatar Airways—had already scaled back in terms of staffing as the virus spread, virtually eliminating passenger demand and causing international borders to slam shut.

While Emirates has been applauded during the pandemic for continuing to run repatriation flights around the globe, as well as delivering cargo and critical supplies, it has been dramatically affected by the halting of international passenger travel, just like the rest of the world’s airlines.

In a statement, the company said, “We have endeavored to sustain the current family as is…but have come to the conclusion that we, unfortunately, have to say goodbye to a few of the wonderful people that worked with us.”

Without revealing any particulars of the mass firing, Emirates assured that those being axed from its workforce would be treated, “with fairness and respect.”

ABC News reported that to try and balance some of the immense losses the airline continues to suffer, Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, injected an undisclosed amount of equity into its operations back in March.

Although the flag carrier, owned by a Dubai sovereign wealth fund, had already reduced its staff members’ pay during the course of the global health crisis.

Meanwhile, Emirates’ home base, Dubai International Airport—typically the world’s busiest in terms of international passenger traffic—has also been running only a fraction of its normal operations.

Dubai, which has positioned itself as a critical hub for the free movement of people, goods and capital from around the globe (all of which the pandemic has disrupted), now depends heavily upon a resumption of activity at its airport.

For more information, visit emirates.com.

This post was published by our news partner: TravelPulse.com | Article Source

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