Mirroring its impact on aviation, the COVID-19 pandemic has had a significant impact on airline companies due to travel restrictions and a slump in demand among travelers. Several airlines have declared bankruptcy, with some ceasing operations, while other airlines reported historic reductions in flights, as well as accelerating retirements of certain aircraft types, such as the Airbus A340, Airbus A380, or the Boeing 747. By 8 October 2020, 43 commercial airlines had gone bankrupt, and many more were expected to follow. In late October 2020, ACI Europe stated that 193 (mostly regional) of the 740 airports in Europe were also risking bankruptcy.

Bankruptcies Avianca, the second oldest airline in the world and the second largest airline in Latin America, filed for Chapter 11 bankruptcy in the Southern District Court of New York on May 10, 2020 and liquidated its subsidiary Avianca Peru the same day. The court in New York approved the airline's reorganization plan on November 2, 2021, and on December 1, 2021, Avianca emerged from the Chapter 11 bankruptcy process more than a year and a half after originally filing. On 11 February 2020, Air Italy ceased operating. This decision was made following the shareholders' meeting of Air Italy (Alisarda and Qatar Airways through AQA Holdings spa). According to the airline, its flights were operated by other carriers according to the original schedule between 11 and 25 February.airitaly.com – Milano, 11 February 2020 14:30 (Italian, English) 11 February 2020businessinsider.de – Air Italy will end operations and liquidate, becoming the latest airline to fail 11 February 2020 On 19 February, Air Italy reopened ticket sales for two public service obligation (PSO) routes, Milan Linate-Olbia and Rome-Fiumicino-Olbia, and planned to operate them between 14 March and 16 April 2020, the date of PSO contract expiry. The airline operated the routes until 3 February 2020, when the Olbia Costa Smeralda Airport closed due to maintenance works for 40 days. Turkish airline AtlasGlobal collapsed on 12 February 2020. British airline Flybe, already struggling financially prior to the virus outbreak, entered administration on 5 March 2020 due to the effects of the pandemic. Charter airline Miami Air International filed for Chapter 11 bankruptcy on 24 March and ceased all operations on 8 May. Trans States Airlines, the sister company of Compass Airlines, which is also on this list. On 17 March 2020, CEO Rick Leach sent a memo to employees stating that due to the impact of the pandemic on travel demand, the airline would cease operations on 1 April 2020. The Italian airline Ernest Airlines collapsed on 5 April 2020. Compass Airlines, a United States regional carrier that operated some flights for American Eagle and Delta Connection, permanently ceased operations. On 19 March, BRA Braathens Regional Airlines announced that they would reduce flight frequencies. Later, they decided to call for "a break." All of their employees in Sweden are temporarily furloughed. CityJet, an airline notable for its flights to and from London City Airport, filed for bankruptcy due to financial issues inflamed by the pandemic. Virgin Australia reduced 8,000 out of 10,000 employees (redundancies and temporary layoff). The airline formally applied for voluntary administration on 21 April 2020, however as of that date, flights are still operating and talks about the future of the airline are continuing. On 26 June 2020 administrators Deloitte announced they had agreed to sell Virgin Australia to American Private equity firm Bain Capital. This was approved by creditors on 4 September 2020, despite bondholders, Singaporean hedge fund Broad Peak and Hong Kong investor Tor themselves wanting to put a bid in to buy the airline. Air Mauritius entered voluntary administration to safeguard the interests of the company and its stakeholders after coronavirus-related disruptions made it impossible for the airline to meet its financial obligations. The airline was seeking to change its business model to address preexisting financial problems when the pandemic had a major impact on its revenue. The airline plans to continue operating. In April 2020, German Airways filed for insolvency with plans to restructure due to the cancellation of Eurowings' wetlease contract for their entire Bombardier DHC-8-400 fleet.airliners.de – "Luftfahrtgesellschaft Walter files for insolvency" (German) 22 April 2020 Thai Airways announced plans to restructure the company under a bankruptcy court. Thai Prime Minister Prayut Chan-o-cha announced that the Thai Government, which owns a majority stake in the airline, would not allow the airline to declare bankruptcy formally. On 20 May 2020, the Ecuadorian government decided to liquidate TAME and ceased all operations. The airline, which had been struggling for several years, claimed that its difficulties were compounded by the impact of the pandemic. LATAM Airlines Group filed for Chapter 11 bankruptcy in the United States for the company and its subsidiaries in Chile, the US, Ecuador, Colombia and Peru on 26 May 2020. On 17 June 2020 LATAM Airlines Group announced it would cease operations of its subsidiary, LATAM Argentina, with all aircraft returned to lessors and all employees laid off immediately. On 18 June 2020, Level Europe announced that it would cease business operations with immediate effect and enter insolvency. On 23 June 2020 SunExpress announced SunExpress Deutschland would cease operations in 2020 and will be orderly liquidated. Its route network would be partially taken over by SunExpress and Eurowings. One Airlines announced on 24 June 2020, that it has ceased operations due to the hard financial situation caused by the pandemic. The owner and chairman, Claudio Fischer Llop, blamed the competition from SKY, JetSMART, and LATAM, which are offering charters at prices that ONE cannot compete with, and the lack of financial support from the Chilean government, making ONE's operation non-viable during the present and near future. NokScoot went out of business 26 June 2020 as it couldn't recover from the pandemic's impacts. The board of directors decided on Friday to liquidate the airline, which left 450 staff members unemployed. NokScoot return three aircraft from the five-jet fleet to the parent company in Singapore by the end of June. On 27 June 2020, the Prime Minister of Antigua and Barbuda announced that LIAT would be liquidated following a series of unsuccessful months due to COVID-19. The airline will be formed into a new entity that will provide vital connections between the Caribbean islands. The sale process of Italy's flag carrier Alitalia was accelerated, and the Italian government cut deadlines for interested investors to submit offers from 31 May to 18 March. Between the weeks of 2 and 9 March – when the Italian government announced a national lockdown – Alitalia's capacity in international flights fell by 22 percent. - Alitalia has now announced the final flight will be October 15, 2021 South African Airways received several billion rand in government aid in early 2020, but the airline had already been under voluntary business rescue since 5 December 2019; stricken by preexisting debts and pandemic-related revenue losses, analysts commented that the airline had effectively "already collapsed" when the government rejected a request for another R10 billion in aid in mid-April. Business rescue practitioners gave the airline's unions a 24 April deadline to agree to a plan to wind down the company, stating that liquidation would commence if no agreement was reached. On 21 July 2020 Jet Time announced it had filed for bankruptcy, after having discharged most of its employees in June due to COVID-19. However, the owner expects and is preparing for a reconstruction in the new company Jettime, to resume operations after the pandemic. The Jet Time CEO, a number of key employees, and five of Jet Time's Boeing 737 airplanes are being transferred to Jettime. On 4 August 2020, Virgin Atlantic filed for bankrupt protection from creditors in the US. The airline sought the protection under chapter 15 of the United States bankruptcy code, allowing it to shield assets in the country. Island Express Air ceased operations and sold its assets to a group of investors. On 5 October 2020 the AirAsia Japan ceased operations due to low demand caused by the pandemic. On 21 October 2020 Cathay Pacific announced that Cathay Dragon would cease operations immediately, after publishing plans to cut 5900 positions across the group. Ravn Air, a regional airline based in Alaska, filed for Chapter 11 Bankruptcy, temporarily ceased all operations, and laid off all staff on 5 April 2020. Interjet, the third-largest Mexican airline, which only flies domestically and is based in Toluca International Airport, was reported to be near bankruptcy on 3 November 2020, after it shut down operations on 1 and 2 November and its personnel went on strike due to 2 months of unpaid wages. In March 2021, Interjet has officially requested to file for bankruptcy by the end in order to receive investment funds and resources. On 18 November 2020, Norwegian Air Shuttle announced that it would file for examinership in Ireland. On 3 September 2021, Philippine Airlines filed for Chapter 11 bankruptcy protection in a U.S. court. On 15 October 2021, Alitalia, having spent four years in administration due to financial struggles, ceased operations.Italy launches new national airline ITA and marks end of Alitalia traveldailymedia.com (10/20/2021) Its operations and assets were transferred to new state airline ITA Airways.

Mergers and acquisitions In 2019, Air Canada was in talks to buy Air Transat for C$720 million but later revised their price to C$180 million in October 2020 due to the impact of the COVID-19 pandemic.

On January 24, 2020, LOT Polish Airlines announced that it would acquire Condor Flugdienst. On 2 April 2020 it was announced that the sale had fallen through due to the industry turmoil caused by the coronavirus pandemic.

In November 2020, Korean Air (more than 170 aircraft) parent Hanjin announced a W1.8 trillion ($1.62 billion) takeover bid for rival Asiana Airlines (82 aircraft) from Kumho Industrial, becoming one of the ten largest airlines in the world, as state-owned Korea Development Bank will invest W800 billion into Hanjin KAL.

Reductions

On 25 February 2020, Aer Lingus noted it had been advised by the Department of Foreign Affairs that travel restrictions were being placed on several Italian towns within Italy's Lombardy region as a result of the pandemic, however stated all flights would continue to operate, further advising all flights operated would continue to comply with guidelines locally from the HSE as well as from the World Health Organization (WHO) and European Aviation Safety Agency (EASA). On 28 February, Aer Lingus had been informed that a passenger had travelled with COVID-19 on a service from Milan-Linate to Dublin and that it was cooperating fully with the HSE and Department for Foreign Affairs. Four Aer Lingus Cabin Crew were also placed into self-isolation from the flight in question. The following day, Aer Lingus announced flight suspensions to Northern Italy, subsequently extending this on 10 March to all services to Italy. On 13 March, the President of the United States announced a European travel ban which initially exempted Ireland, however was extended to cover Ireland the following day. Aer Lingus subsequently announced network-wide reductions which eventually saw its network of flights reduced by 95%, the airlines plan for its biggest summer schedule within its history was scuppered as a result of what became a global pandemic. In a temporary measure, the airline confirmed it was cutting hours and salaries for all employees by 50%. AirAsia Group announced they temporarily suspended all operations.