Airlines to lose USD 113 bn in 2020 due to Novel Coronavirus?
According to reports, airlines all across the globe could lose passenger revenues amounting to a whopping sum of USD $113 billion, if the Coronavirus pandemic continues. This was said by the International Air Transport Association (IATA).
IATA said that financially, this would be equal to what the airline industry had experienced, at the time of the global financial crisis.
A previous analysis made by the IATA, issued on February 20, 2020, had estimated the loss would be USD $29.3 billion. This was based on the scenario that the effects of Novel Coronavirus, would mainly be restricted to Chinese markets.
“Since that time, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China. Financial markets have reacted strongly. Airline share prices have fallen nearly 25% since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003. To a large extent, this fall already prices in a shock to industry revenues much greater than our previous analysis.”
Alexandre de Juniac, Director General and CEO of IATA said:
“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times.”
IATA also said that there were no estimates available as to how Novel Coronavirus would affect cargo operations.