The ongoing coronavirus outbreak in the Asia Pacific region has had serious consequences for airlines. In particular, carriers flying to and from China have been affected. The coronavirus outbreak has hit this country harder than any other.
According to the latest World Health Organisation (WHO) data, there are now almost 76,000 cases reported of coronavirus. Of these, 2,129 have died. The majority of cases (99%) hail from China: 74,675. In an effort to stop the spread of the disease, and in line with a fall in demand, airlines are cutting and/or suspending flights to China and nearby countries.
What’s the latest?
Today the International Air Transport Association (IATA) released a report suggesting the potential impact of the coronavirus outbreak. The Association believes that the forecasted growth for the Asia-Pacific region of 4.8 percent will instead be a contraction of 8.2 percent. Combined, this would mean demand will be down 13% from what had been estimated for 2020. This would cost Asia-Pacific carriers some $27.8 billion.
Speaking on more global terms, IATA believes that the aviation industry will experience a 4.7 percent fall in demand. This itself would cost $1.5 billion. Combined with the estimated Asia Pacific lost, the total lost revenue due to the disease globally could be as much as $29.3 billion.
According to IATA, the figures above are modeled on how the SARS virus affected demand in 2003. This was essentially a sharp decline for six months, followed by a strong six-month recovery.
Speaking of this latest forecast, which was released today, Alexandre de Juniac, IATA’s Director General and CEO said:
“These are challenging times for the global air transport industry. Stopping the spread of the virus is the top priority… The sharp downturn in demand as a result of COVID-19 will have a financial impact on airlines—severe for those particularly exposed to the China market.”
How are airlines coping with the crisis?
In response to the coronavirus outbreak in the Asia-Pacific region, demand has fallen. As a result, airlines have cut some routes to the area. One example, British Airways, has suspended flights to mainland China until April at the advice of the UK government.
Cathay Pacific was already dealing with the effects of a fall in demand due to protests in Hong Kong. However, the coronavirus outbreak has exasperated the situation somewhat.
Meanwhile, US airlines such as United Airlines and American Airlines have suspended flights to Hong Kong in addition to mainland China. In fact, United, Delta, and American have all suspended flights on these routes until late April. Of course, depending on the progression of the virus’ spread, all of these flight suspensions could be increased.
How do you think Coronavirus will impact global aviation? Let us know your thoughts in the comments!