The next challenge will be preventing airlines from sinking under the burden of debt that the aid is creating,” he added. “Today, there is a liquidity crisis being managed mainly by state loans and subsidies,” say Bertrand Mouly-Aigrot, aviation expert with Archery Strategy Consulting. “But this liquidity crisis is going to morph pretty quickly into a debt crisis and there are probably firms who won’t be able to come back” under their debt burden weight, he told the Agence France-Presse. In contrast, the ratings agency noted low-cost carrier Ryanair flew into the crisis with strong liquidity and little debt. That will hit carriers primarily dependent on long-haul revenue such as Cathay Pacific or Singapore Airlines, as well as carriers in the Gulf.

Source: Manila Times June 11, 2020 16:18 UTC