Coronavirus outbreak has been highly disruptive for the aviation sector, threatening the survival and sustainability of airlines. Apart from massive losses attributed to suspended operations, the industry foresees a grim recession beforehand. Restrictive movements, weak tourism, curtailed earnings, compressed commercial activities, and fear psychosis are anticipated to compress the passenger need from 30 to 60 %, endangering the commercial viability of airlines operation. Fragile to defy the cyclic momentary shocks of oil price change, demand flux, decreasing currency, accounting firms warrant strong structural changes in their working strategies, business model, earnings, and pricing strategies to survive the long-term consequences of Covid-19.
Paper attempts to analyse the impact of lockdown and COVID-19 crisis on India's airlines and potential challenges ahead. The Accounts NextGen study also suggests the potential way-out for mitigating the expected losses.
There is the private business can focus on straight away:
1. Employing any bailout funds obtained from the public purse in smart ways, with the double purpose of transforming our industries so that they become a part of a new, low-carbon market.
2. Supporting national green new deal strategies, decreasing carbon emissions while also investing in workers, and enabling them to adapt to new technologies.
3. Purchasing innovation. The companies who get in front of this curve will reshape low-carbon savings. After the financial crisis in 2008-09, we found some industries bloom -- the solar industry, for instance.
4. Reduce pollutants, and include measurement and reporting of these in accounting firms. This includes engaging stakeholders in their distribution chain to decrease air pollution. Just as the industry has overcome health epidemics, economic recessions, unlucky safety incidents, and other debilitating events, it also will overcome the COVID-19 crisis.
How to Avoid a COVID-19 Plane Crash
The actions that government, industry leaders, and human airlines take during this period will influence how deep the crisis reaches, how long the effects last, how fast the industry recovers, to what extent the accounting firms are going to be changed, and which firms will emerge relatively stronger compared to their peers.
It's incumbent upon today's generation of leaders to handle COVID-19's influence on the airline industry boldly and decisively. This requires taking swift and aggressive actions, embracing new methods of thinking and working, and--maybe most significantly in this crisis communication empathetically, thoughtfully, and transparently with employees, clients, shareholders, and the general public at large.
Public policy interventions in the aviation industry have experienced different rationales. Most interventions have targeted aircraft manufacturers. These accounting firms are often subject to learning-by-doing and significant economies of scale, which may cause under-investment in engineering, innovation, or manufacturing facilities and, hence, justify public support. Public policies have also directed at coordinating a wide array of providers and distinct know-how and ensuring aircraft safety. More recently, aircraft producers have also been the target of green industrial policies, attempting to accelerate the shift towards low-carbon aircraft. Beyond encouraging aircraft producers, governments also have intervened to preserve a job in big air transport businesses. When it concerns the response to the COVID-19 emergency, the majority of the industry - or firm-specific measures thus far have concentrated air transportation.
Update Your Financials - that comprises key figures regarding wages and profitability. These amounts are essential when applying for some of the government subsidies that need proof of the decrease in earnings and qualifying criteria scheme. accounting firms also provide you a picture of the tax position that will help you decide if you need to look at deferral of any tax debts.
Know the Loan Concessions Offered by the banks
It would be imperative to determine if defaults could have triggered under various funding agreements entered from the airline companies. Where an event of default is only activated upon a voluntary suspension of the accounting firms company, it may be contended that such temporary cessation of business due to the virus epidemic is an immediate effect of the government regulations and consequently beyond the scope of such provision. Further, it would be relevant to assess if an event of default is qualified by a requirement that a business suspension has a “material adverse impact" on the borrower's ability to perform its contractual obligations. When there is a significant effect on the borrower's ability to pay, this will likely satisfy the evaluation material adverse effect.
Author Bio
Hello, I am Arpit Umrewal working as a Digital Marketer in the Accounts NextGen Group based in Melbourne, Australia. we are dealing in Finance and Accounting Services. We also provide an Accounting Internship and Accounting Training for new Student who builds our future as an Accountant.
