Airlines’ revenues set to take a $30bn hit due to coronavirus

Alexandre de Juniac

Airline revenues could take a $29.3bn hit as a result of the coronavirus outbreak, according to IATA’s latest assessment.

IATA said that the coronavirus could cause demand for air travel to fall for the first time since the global financial crisis, with operators in Asia-Pacific hardest hit.

Based on a scenario where the coronavirus has a “V-shaped impact” similar to that seen during the SARS outbreak in 2003 – which was characterised by a six-month period with a sharp decline followed by an equally quick recovery – global demand measured in RPKs would be 4.7% down on IATA’s previous 2020 outlook.

In that outlook, it predicted a 4.1% rise in passenger demand for the year, but its new assessment suggests a 0.6% net contraction.

“Airlines are making difficult decisions to cut capacity and in some cases routes,” states IATA director general Alexandre de Juniac. “Lower fuel costs will help offset some of the lost revenue [but] this will be a very tough year for airlines.”

Carriers in Asia-Pacific would see a 13% drop in full-year passenger demand, IATA estimates, which would translate to an 8.2% net contraction compared with 2019 levels.

The region’s carriers would see revenue lower by $27.8 million – the bulk borne by China-registered operators.

Some $12.8 billion would be lost in China’s domestic market alone.

Outside Asia-Pacific, carriers would see a revenue loss of $1.5 billion – but only if the demand fall is limited to markets linked to China.

“If [the coronavirus] spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger,” IATA says.

The association adds that it is too early to predict what lost revenue would mean for global profitability.

Share this story

Related Topics

Latest iata news

Röhlig Logistics achieves CEIV lithium batteries

Röhlig Logistics’ US business has achieved IATA Center of Excellence for Independent Validators Lithium Batteries (CEIV Li-batt) certification for its…

Read More

Share this story

Air cargo declines continue to narrow in July

Declines in air cargo volumes narrowed to their lowest level of the year so far in July as the market…

Read More

Share this story

Swissport gains IATA pharma standard in Liege and Toronto

Swissport’s cargo facilities at Liège Airport in Belgium and Toronto Pearson International Airport in Canada have obtained IATA’s CEIV Pharma…

Read More

Share this story

Damian Brett

Damian Brett
I have been writing about the freight and logistics industry since 2007 when I joined International Freighting Weekly to cover the shipping sector.After a stint in PR, I have gone on to work for Containerisation International and Lloyds List - where I was editor of container shipping - before joining Air Cargo News in 2015.Contact me on [email protected]