The International Air Transport Association (IATA) has reported that carriers in the Middle East could be vulnerable if travel restrictions related to the coronavirus spread further to the rest of Asia Pacific and if the slow-down in Chinese economy was to impact the travel demand in the region.

In its 'Economics Chart of the Week,' IATA said looking at the initial impact of the coronavirus (Covid-19) on air travel demand, "it is not surprising that Asia Pacific carriers are the most vulnerable" — with about 42% of their total base passenger revenues coming from the routes to, from and within China.

"China being the second largest domestic market in terms of RPKs (Revenue Passenger Kilometers) in the world further exacerbates its importance. The domestic China market constitutes almost one third of passenger revenues, which is almost double of the share of revenues from China international routes for Asia-Pacific carriers," IATA said in its note.

Impact to Middle East carriers

Nonetheless, it added that Middle East carriers could be highly-impacted as well.

"If the travel restrictions spread further to the rest of Asia Pacific and if the slow-down in Chinese economy was to impact the travel demand in the region, revenue risk of carriers based in other regions would rise sharply," IATA said.

"Under that scenario, the Middle East carriers’ exposure increases from 3% to almost 50%, as they are connecting the region to the rest of the world, mainly Europe. This poses a substantial business risk for a regional group which has been posting losses even before the virus outbreak," it added.

Similarly, IATA said for European carriers’ exposure rises six-fold to 12%.