Lufthansa to release earnings amid virus-induced aviation crisis
German airline Lufthansa is set to report earnings today amid unprecedented turmoil in the airline industry.
The COVID-19 pandemic has seen travel barriers erected across the world, dealing a heavy blow to a crucial sector of the economy.
Many airlines have been forced to reduce flight volume as demands falls to rock bottom, arousing fears regarding the industry’s ability to weather this storm. Among other austerity measures, thousands of airline workers are likely to be laid off or suffer significant pay cuts.
Stocks for major airlines globally have plunged by double digits. With many airlines already debt-ridden, the International Airline Trade Association claims that $200 billion worth of injections will be needed to shelter the sliding industry.
Both the US and the EU are considering stimulus package proposals, and it is likely other governments will follow. However, due to widespread political gridlock, the efficacy of government response is questionable. Expect the airline industry’s losses to reverberate into other related sectors, such as hotels and tourism. Coupled with overall economic lethargy, this almost certainly signals a potentially catastrophic economic recession.
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