Global body International Air Transport Association (IATA) on Thursday said it assesses carriers in the Asia Pacific to incur a revenue loss of $27.8 billion, while global carriers will lose $29.3 billion in 2020 as an impact of the Novel Coronavirus outbreak.
The estimate is based on projections of a 13-percent full-year decline in passenger demand, mostly in China, the trade body said.
"This will be a very tough year for airlines," IATA CEO Alexandre de Juniac said in a statement. "Stopping the spread of the virus is the top priority."
IATA said its estimate assumed that COVID-19 behaved like the SARS outbreak nearly two decades ago, which was "characterised by a six-month period with a sharp decline followed by an equally quick recovery".
“Considering that growth for the region’s airlines was forecast to be 4.8%, the net impact will be an 8.2% full-year contraction compared to 2019 demand levels. In this scenario, that would translate into a $27.8 billion revenue loss in 2020 for carriers in the Asia-Pacific region—the bulk of which would be borne by carriers registered in China, with $12.8 billion lost in the China domestic market alone,” it said in a statement.
Carriers outside Asia-Pacific are forecast to bear a revenue loss of $1.5 billion, assuming the loss of demand is limited to markets linked to China. This would bring total global lost revenue to $29.3 billion and represent a 4.7% hit to global demand.
The estimated impact of the COVID-19 outbreak also assumes that the center of the public health emergency remains in China. If it spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger.
But there are some factors potentially softening the blow, IATA said. "Governments will use fiscal and monetary policy to try to offset the adverse economic impacts. Some relief may be seen in lower fuel prices for some airlines, depending on how fuel costs have been hedged," it said.