Coronavirus outbreak could cost airlines $30billion as industry body warns ‘this will be a very tough year for us’

IATA forecasts total air passenger demand to fall by 4.7 per cent this year
Air France-KLM, Qantas and Cathay Pacific have all been severely affected
About 2,200 people have died and 76,800 infected by the coronavirus illness

By HARRY WISE
DAILYMAIL.COM
21 February 2020

A ‘SARS-shaped’ Covid-19 epidemic could end up costing airlines $29.3billion (£24billion), according to their global trade association.

The International Air Transport Association (IATA) says carriers in the Asia-Pacific region stand to lose up to $27.8billion in revenue from the coronavirus outbreak due to a projected 13 per cent year-on-year decline in passenger demand.

Domestic airlines in China, where 99 per cent of Covid-19 cases have been identified, are predicted to lose around $12.8billion in revenues, compared to a modest $1.5billion in losses in air transport outside the Asia-Pacific region.

Australia’s flagship airline Qantas, Air-France-KLM, and British Airways are among the many airlines who have stated that the virus is expected to cause considerable financial impact for them.

British Airways decided yesterday to suspend all direct flights to mainland China until 17 April, while Air-France KLM estimates they will lose between £130million and £170million if flights to mainland China are suspended until tmid-April.

IATA’s director general admits Alexandre de Juniac has admitted 2020 ‘will be a very tough year for airlines,’ but that his organisation is working with numerous institutions including the World Health Organisation (WHO) to contain the outbreak.

‘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,’ he adds.

The agency forecast total air passenger demand to fall by 4.7 per cent this year, the first times this has happened since the global financial crisis.

Its estimates foresee a scenario where Covid-19 has a V-shaped impact, similar to what happened during the SARS virus outbreak in 2003, with a sharp dive followed by a quick recovery, according to IATA.

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