World Air Travel Could Lose $113Bln This Year From Coronavirus - Global Aviation Body

WASHINGTON (UrduPoint News / Sputnik - 06th March, 2020) The world airline business could lose up to $113 billion this year due to the coronavirus crisis as flights get canceled and people stop traveling due to contagion fears, the International Air Transport Association (IATA) said in a statement.

"IATA now sees 2020 global revenue losses for the passenger business [at] between ... $63 billion and $113 billion," the global aviation body said on Thursday.

Under the first scenario, where there would be limited impact on the industry followed by a rapid, V-shaped recovery, the fall in air travel demand translates to an 11 percent passenger revenue loss equaling $63 billion, IATA said.

The group said China would account for some $22 billion of this total. Markets associated with Asia, including China, would account for $47 billion, IATA said.

Breaking down the numbers, IATA estimated that Asian passenger figures would fall an initial 11 percent. Separately, China's passenger market alone would take a 23 percent hit, followed by South Korea (-14 percent) and Singapore (-10 percent).

In Europe, the initial loss would be 7 percent, but this excludes Italy (-24 percent), France (-10 percent) and Germany (-10 percent).

In the middle East, the passenger market is also expected to decline 7 percent aside from Iran, which alone is expected to suffer a 16 percent drop.

But if the downturn was prolonged and the impact proved more severe, then the same percentages would apply under a second scenario, but the gross loss forecast on worldwide airline income would be 19 percent equating to $113 billion.

"Financially, that would be on a scale equivalent to what the industry experienced in the Global Financial Crisis," IATA said, referring to the 2008-2009 recession era.

IATA said the estimated losses to airlines from the crisis had gone up multi-fold since its first analysis on February 20, where it put lost revenues at $29.3 billion based on a scenario largely confined to the pandemic's impact on China.

The world airline body noted that financial markets have already shown strong adverse reaction to the crisis, with airline shares falling nearly 25 percent since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS health crisis of 2003.

IATA also said its estimates only covered passenger travel, and not� cargo, where no studies have been made yet on impact.