The International Air Transport Association (IATA) has called on governments to support the airline industry noting how the ongoing coronavirus disease (Covid-19) outbreak has become a crisis 'almost without precedent'.
In its updated analysis on the financial impact of the outbreak, IATA said it now sees 2020 global revenue losses for the passenger business of between US$63 billion — in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March —and US$113 billion, should it spread beyond the current affected areas.
No estimates are yet available for the impact on cargo operations.
IATA director general and CEO Alexandre de Juniac, speaking on the impact of the coronavirus on the airline industry said many carriers are cutting capacity and taking emergency measures to reduce costs.
“The turn of events as a result of Covid-19 is almost without precedent. In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse. It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis,” de Juniac said on March 5.
“Many airlines are cutting capacity and taking emergency measures to reduce costs,” he added.
Among the markets expected to suffer the biggest blow from Covid-19 are China which is expected to shed 23% of its passenger numbers, Japan (-12%), Singapore (10%), South Korea (14%), Italy (24%), France (10%), Germany (10%), and Iran (16%).
Asia (excluding China, Japan, Singapore and South Korea) would be expected to see an 11% fall in demand. Europe (excluding Italy, France and Germany) would see a 7% fall in demand, while the Middle East (excluding Iran) would see a 7% fall in demand.
“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,” de Juniac added.
