Covid-19 Gives Global Economy The Shivers

Words like recession, credit crisis and even depression are on forecasters’ lips. The virus has caught governments flat-footed

- Paran Balakrishnan

In what seems the blink of an eye, the world around us has changed beyond recognition. In countries as far apart as China and Italy, streets have emptied with only the occasional delivery rider who has the street to himself. In Paris, the famous roadside cafés have shuttered — that didn’t happen even when the Germans paraded down the Champs-Elysees in World War 2. Even the Taj Mahal is closed.

The only question now on everyone’s minds is how quickly can the virus be tamed and will we quickly be able to return to life as it was before? Or will the damage be so heavy it will take years to recover? The portents aren’t great with the same scenarios being played out across the world: governments being caught flatfooted, events cancelled and people self-isolating or under lockdown.

Can Indian firms, many already financially shaky after a difficult decade, withstand this global medical crisis?

Airlines in a tailspin

The first industry flying into headwinds has been, of course, the aviation industry. Around the world, airlines are grounding planes and asking staff to take leave. With India closing its borders to the EU and Middle East countries, Air India and Indigo have cancelled international flights.

British Airways has already said 75 per cent of its fleet won’t take off in April and May while US airlines are reportedly considering the unthinkable: halting all domestic air travel amid worry about the virus’s spread.

Head eastwards, and with the Chinese market shut for business, Cathay Pacific was one of the first airlines buffeted by the turbulence. It grounded three-quarters of its fleet. But this is where the story plays out differently. Cathay’s now scrambling its flight crews and putting planes back on its old routes.