NewsMarch 1, 2020

COVID-19 Outbreak to Cost Airlines Almost $30bn

Cancelled flights to mainland China and reduced demand for travel because of the COVID-19 could wipe $30 billion from the revenues of global airlines, according to International Air Transport Association.

The International Air Transport Association (IATA) predicts demand for air travel will fall for the first time in more than a decade.

Overall, the impact of lower global demand for air travel because of the COVID-19 could cost airlines $29.3 billion this year—a fall of 4.7%.

Airlines operating in the Asia-Pacific region face the biggest hit with a $27.8 billion drop in revenue, while international carriers could lose $1.5 billion in revenue.

This marks a major hit for global air travel, which IATA said was expected to grow 4.1% this year, but is now actually set to contract slightly thanks to local and international carriers cutting back on flights because of lower demand.

This decline would mark the first fall in demand since the global financial crisis in 2009, the body said.

The impact of the COVID-19 on airlines has dwarfed the 2002–03 SARS outbreak that caused a $7 billion drop in revenues.

Of that figure, IATA predicts that carriers in China are set to lose revenue of $12.8bn in their home market alone.

“Airlines are making difficult decisions to cut capacity and in some cases routes,” said IATA’s Director General Alexandre de Juniac. “This will be a very tough year for airlines.