The Covid-19 situation has hit the aviation industry really hard and in particular the airlines, since they are a highly capitalized business which needs constant cashflow to fund their operating costs, capex and fixed costs.
In the scenario where they have to cut capacity like where we are in this situation now, the company may be able to “save” on their operating costs since they do not have to incur charges like handling and ground charges that are related to the operating business.
But they do have to continue paying for parking charges to the airport, levies as well as fixed costs such as salaries and rental that will continue to bleed the business.
