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

Marco Green
February 21, 2020

The new coronavirus outbreak will result in revenue losses of $27.8 billion in 2020 to airlines in the Asia-Pacific region in 2020, almost half of them Chinese carriers, the International Air Transport Association said on Thursday.

A first estimate of the impact on Asia-Pacific airlines of COVID-19 forecasts 2020 passenger demand will be slashed by 9 percent compared to 2019 as the region's carriers see revenue plummet by $US27.8 billion in "a very tough year".

The organization In December forecast global demand growth of 4.1 percent for the year but now expects it to contract by 0.6 percent.

This would translate into a US$27.8 billion revenue loss in 2020 for Asia-Pacific airlines - the bulk of which would be borne by airlines registered in China, with US$12.8 billion lost in the China domestic market alone.

Airlines stand to lose $29.3bn (£23.7bn) of revenue this year due to the coronavirus outbreak, the global airline industry body has warned.

The IATA said its estimate assumed that COVID-19 behaved like the SARS outbreak almost two decades ago, which was "characterised by a six-month period with a sharp decline followed by an equally quick recovery". "If it spreads more widely to Asia-Pacific markets then impact on airlines from other regions would be larger", it said.

IATA said its estimates are based on models that consumers will quickly return to normal travel patterns once the outbreak is stopped, as happened after the SARS epidemic.

However it is too early to predict what this expected revenue loss will mean for airline's profitability this year, IATA cautioned.

It noted governments would use fiscal and monetary policy to try to offset the adverse economic impacts and there could be some relief for airlines from lower fuel prices.

"These are challenging times for the global air transport industry".

In a statement Alexandre de Juniac, IATA's director-general said: "Airlines are making hard decisions to cut capacity and in some cases routes".

"Stopping the spread of the virus is the top priority", de Juniac added.

"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", IATA Director General Alexandre de Juniac said in a statement.

Nearly half of that would be borne by Chinese airlines.

Other reports by Click Lancashire

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