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According to Bloomberg, many airlines have been driven into a technical bankruptcy or they have substantially breached debt covenants already. 

Questions:

  1. Explain why the debt covenants are characteristic of the airline industry.

2. The article talks about steps that have been already taken by some airlines as they are depleted of cash. What are some of these?

3. According to the International Air Transport Association, how much in revenues are airlines facing to lose this year?

Source:

Kotoky, A. (2020). Coronavirus Could Bankrupt Most Airlines by End of May, Consultant Warns. Bloomberg, March 16 (Retrievable online at https://www.bloomberg.com/news/articles/2020-03-16/virus-to-bankrupt-most-airlines-by-end-of-may-consultant-says)