IATA: Coronavirus could cost global airlines $30 billion in lost revenue
Global airlines could lose almost $30 billion in revenue due to a rapid decrease in travel demand, caused by coronavirus epidemic, the International Air Transport Authority (IATA) has warned in its latest airline industry forecast.
According to IATA’s forecast, if the outbreak remains mostly in China, Asian airlines will be hit the hardest and could lose nearly $28 billion in revenue this year. Carriers outside the region are likely to suffer a smaller sales hit of $1.5 billion.
“If it spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger,” the organization said.
According to the IATA, the outbreak will also likely reduce global traffic by almost five percent, marking the first overall decline in demand since the global financial crisis of 2008-09.
Overall, passenger traffic in the Asia-Pacific region is expected to fall by 8.2 percent this year, compared to an earlier estimate of a 4.8 percent rise.
“Airlines are making difficult decisions to cut capacity and in some cases routes,” said IATA Director General Alexandre de Juniac. “Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines.”
Dozens of airlines have canceled or reduced services to mainland China amid the novel coronavirus outbreak.
Qantas Airlines said the virus could carve up to $100 million of pre-tax profit from the second half of the company’s fiscal year. Air France-KLM expects earnings drop by as much as $216 million between February and April.