Asia Pacific carriers to lose $27.8 billion revenue due to coronavirus: IATA

MUMBAI: Global body International Air Transport Association (IATA) Thursday said it assesses carriers in the Asia Pacific to incur a revenue loss of $27.8 billion, while global carriers will lose $29.3 billion in 2020 as an impact of the Novel Coronavirus outbreak.

The impact shows a potential 13% full-year loss of passenger demand for carriers in the Asia-Pacific region.

“Considering that growth for the region’s airlines was forecast to be 4.8%, the net impact will be an 8.2% full-year contraction compared to 2019 demand levels. In this scenario, that would translate into a $27.8 billion revenue loss in 2020 for carriers in the Asia-Pacific region—the bulk of which would be borne by carriers registered in China, with $12.8 billion lost in the China domestic market alone,” it said in a statement.

Carriers outside Asia-Pacific are forecast to bear a revenue loss of $1.5 billion, assuming the loss of demand is limited to markets linked to China. This would bring total global lost revenue to $29.3 billion and represent a 4.7% hit to global demand.

The estimated impact of the COVID-19 outbreak also assumes that the center of the public health emergency remains in China. If it spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger.

“These are challenging times for the global air transport industry. Stopping the spread of the virus is the top priority. Airlines are following the guidance of the World Health Organization (WHO) and other public health authorities to keep passengers safe, the world connected, and the virus contained. The sharp downturn in demand as a result of COVID-19 will have a financial impact on airlines—severe for those particularly exposed to the China market. We estimate that global traffic will be reduced by 4.7% by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the SARS crisis of 2003. And that scenario would translate into lost passenger revenues of $29.3 billion. Airlines are making difficult decisions to cut capacity and in some cases routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines,” said Alexandre de Juniac, IATA’s Director General and CEO.