Coronavirus outbreak to wipe $30bn off airlines’ revenues.
Cancelled flights and reduced demand to mainland China because of the coronavirus is expected to wipe $30 billion from the revenues of global airlines.
The International Air Transport Association (IATA) predicts the impact of the virus will result in a fall in air travel for the first time in more than a decade.
Airlines in China and other parts of the Asia Pacific region will face the biggest hit.
“Airlines and governments are in this together. We have a public health emergency, and we must try everything to keep it from becoming an economic crisis,” said IATA CEO Alexandre de Juniac.
“The sharp downturn in demand as a result of Covid-19 will have a financial impact on airlines – sever for those particularly exposed to the China market. We estimate that global traffic will be reduced by 4.7 per cent by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the Global Financial Crisis of 2008-09.
“Airlines are making difficult decisions to cut capacity and in some case routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines.”
On Thursday, Qantas said the outbreak would cost the airline $150m AUD ($99m USD), while Air-France KLM put their cost at up to €200m ($216m USD).
Beyond aviation, the virus has disrupted supply chains of the world’s largest companies from Apple to Land Rover and Nike.
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