Even in an industry devastated by the coronavirus crisis, Latin American airlines stand out.

Five of the biggest carriers in the region—Latam Airlines Group SA, Gol Linhas Aereas Inteligentes SA, Azul SA, Avianca and Volaris—have seen $12 billion in their market value wiped out since the end of January. On average, their stock has tumbled 78% in local currency terms, more than all 23 members in the Bloomberg World Airlines Index. The global gauge is down 45% in the period.

Latin American companies, operating far from China and with almost no direct flights to Asia, weren’t expected to see the same massive hits as other parts of the world when the coronavirus chaos began earlier this year. The region’s major carriers are now buckling along with their U.S. and European counterparts, underscoring just how quickly the crisis has upended the entire industry.

“Investors had some expectation that the region was going to be spared,” said Reno Bianchi, an independent airline analyst in New York. “Unfortunately, that’s not going to happen. No one wants to fly any place.”

While the industry reels, not all airlines are created equal, and investors are laying down their bets on which companies stand a better chance at survival and which may be first to fall. Panama’s Copa Holdings SA and Sao Paulo-based Azul look relatively in a better position. Investors appear most nervous about Colombia’s Avianca, whose bond yields have topped 60%, and Mexico’s Interjet, which stoked anxiety among its lessors after it grounded some of its Airbus SE planes. Gol’s 2025 dollar bond traded at 35 cents on the dollar on Wednesday, down from 95 cents at the start of the month.

Moody’s Investors Service on Tuesday downgraded the credit rating on Santiago-based Latam and Azul by one step to B1 from Ba3, designating both as high credit risks. Grupo Aeromexico SAB was also lowered further into junk territory, while Gol’s rating was placed under review for a possible cut.

‘Most Risky’

“We do not rule out the possibility of financial distress if the COVID-19 situation continues to escalate,” JPMorgan analysts Fernando Abdalla and Guilherme Mendes wrote in a report. “Avianca would be the most risky company in that sense, considering its elevated leverage.”

The Bogota-based carrier, which just months ago restructured debt and launched a business turnaround strategy, said it will cut capacity by as much as 40% amid collapsing demand. That hasn’t reassured investors, who cite the company’s high leverage ratios and dependence on international travel, which accounts for about 75% of passenger revenue.

Avianca’s junk-rated bonds due in 2023 have fallen to 30 cents on the dollar, pushing yields deep into distressed territory, according to data compiled by Bloomberg.

Aeromexico’s bonds due in 2025 have also suffered, tumbling to a new low of about 30 cents and driving the yield above 41%. The company, which counts Delta Air Lines Inc. as its largest shareholder, faces about $370 million in upcoming payments and listed $480 million in cash on hand at the end of last year. It raised $400 million in international debt markets in January and management has reduced international flights by 40% and frozen some investments.

The carrier is “weakly positioned for a sharp decline in passenger demand” as it’s less profitable than some peers and faces competition from U.S. carriers, Moody’s wrote in a note.

Panama’s flagship airline, Copa, may be in the best position to ride out the storm—relatively speaking. The company carries less debt than other major players and has the collateral to put up if it needs to borrow. Copa said it “maintains a strong financial position, with low leverage and high liquidity.” Still, it decided to reduce capacity by 80% in April and hasn’t ruled out a temporary shutdown of all operations. Its stock has fallen 74% this year.

“We estimate Copa is the only airline capable of reaching end-2020 with remaining cash in a skies-closed scenario, without having to raise additional debt,” UBS analysts led by Rogerio Araujo wrote in a report.

Brazil’s major airlines are less exposed to international travel than peers, with Gol receiving around 13% of passenger revenue from international trips and Azul getting about a quarter, according to Gimme Credit analyst Cedric Rimaud. Still, the reliance on domestic travel exposes the airlines, whose major costs are in dollars, to currency fluctuations. The Brazilian real and Mexican peso have both tumbled 21% this year, the most in emerging markets after the Russian ruble, according to data compiled by Bloomberg.

Both Azul and Gol have “adequate” liquidity to cover short-term debt, according to Moody’s. Still, bonds tied to the companies hit record lows this week and their share prices have collapsed. Azul’s 2024 dollar bond tumbled to 41 cents on the dollar from above 99 cents just two weeks ago.

The region’s largest carrier, Latam, cut 90% of international flights and reduced domestic capacity by 40%. The carrier entered the downturn with plenty of cash, about $1.5 billion, to cover roughly $1 billion in short-term maturities, according to Moody’s.

How Long?

For carriers across the region, it’s a question of how long the situation will last. Globally, the coronavirus pandemic is expected to bankrupt most airlines by the end of May unless governments and the industry take coordinated steps to avoid such a situation, aviation consultant CAPA Centre for Aviation warned this week.

So far, Latin American officials, already dealing with the effects of a tanking global economy, have shown little appetite to bail out airlines.

“It’s hard to predict for how long the lock-down will last and when coronavirus cases will peak in Brazil and Latin America. Expenses with personnel and leasing continue, but airlines have been cutting capacity,” said Marcelo Cavalheiro, a founding partner at Safari Capital, based in Sao Paulo. “They’re doing everything they can, but the situation is very complicated.”