Coronavirus outbreak has been the main news in the world for a month now and while China is taking steps to contain the virus, the aviation industry is feeling the consequences.
The International Air Transport Association (IATA) predicts demand for air travel will fall for the first time in more than a decade with airlines in China and other parts of the Asia Pacific region are expected to take the vast majority of the impact. The impact of the virus – now officially named Covid-19 – shows a potential 13 per cent full-year loss of passenger demand for carriers in the Asia Pacific region alone. When combined with the effect on airlines outside of the region, this translates to a potential US$29.3 billion (£22.7 billion) revenue loss for 2020 – 5 per cent lower than IATA. The association said its estimate is based on the idea that the coronavirus scenario will have a similar impact on demand experienced during the SARS outbreak of the early 2000s. It said that situation saw a v-shaped trend with a sharp decline followed by an equally quick recovery.
IATA director general and CEO Alexandre de Juniac commented: “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 Organisation (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 – sever for those particularly exposed to the China market. We estimate that global traffic will be reduced by 4.7 per cent by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the Global Financial Crisis of 2008-09…
“Airlines are making difficult decisions to cut capacity and in some case routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines”.
IATA has previously forecast that the Asia Pacific region would be the biggest driver of air travel demand between 2015 and 2035, with four of the five fastest-growing markets in terms of passengers being from Asia.
On Thursday, two major airline groups warned of a severe financial impact as a result of the coronavirus hitting demand for travel in Asia.
Australia’s Qantas said the outbreak would cost it up to 150m Australian dollars ($99m; £76m), while European carrier Air-France KLM put the cost at up to €200m ($213m; £168m) for the period between February and April.
Full impact assessment by IATA can be read here: https://www.iata.org/en/iata-repository/publications/economic-reports/coronavirus-initial-impact-assessment/
ADVICE FOR PASSENGERS
“If you are sick, don’t travel. If you have flu-like symptoms, wear a mask and see a doctor. And when you travel wash your hands frequently and don’t touch your face. Observing these simple measures should keep flying safe for all,” said Dr. David Powell, IATA’s Medical Advisor.
