Several major airlines could go bankrupt within weeks as a large number of flights are being cancelled around the world, a Dubai-based billionaire has warned. The statement come as the ongoing conflict in the Middle East has left the aviation industry paralysed with bookings falling and fuel costs surging.
Gediminas Ziemelis, the founder of Avia Solutions Group said that the situation is quiet similar to the Covid times with grounded planes, collapsing demand and no clear timeline for recovery. He told Bloomberg: “We need to be ready for any area, district, jurisdiction and geopolitical risk. If it lasts more than one month, we may see potential first bankruptcies,’ of airlines around the world.”
Fuel prices are soaring, adding significant strain to airlines already grappling with disrupted routes. Mr Ziemelis said that bfuel normally makes up about a quarter of an airline’s operating costs, but the recent conflict has pushed oil prices up by nearly 50 per cent to around $100 a barrel.
The sharp rise is forcing some airlines to introduce extra surcharges, while others are cutting routes entirely to manage expenses. At the same time, concerns are growing about whether there will be enough jet fuel available, adding yet another layer of uncertainty for the industry.
Airlines are increasingly being forced to reroute services to avoid large swaths of the Middle East, a shift that adds significant time and cost to their operations. In response, many European and Asian carriers have already raised fares and scaled back their networks as the conflict moves into its fifth week.
The situation is even more severe for airlines based in the region, where persistent missile and drone attacks have led to thousands of flight cancellations and the urgent evacuation of passengers, crews and aircraft.
Major operators such as Qatar Airways, Gulf Air, flydubai and Air Arabia are now undertaking internal reviews aimed at cutting expenses and conserving cash, as they continue to lose millions in revenue each day.
However, the billionaire added: « After Covid all companies which survived made extraordinary record profits. So sometimes crisis is opportunity. »
Source link
