- Coronavirus: Asia-Pacific Carriers to Lose $27.8bn to Disruption
The International Air Transport Association (IATA) has said global carriers in the Asia Pacific region would incur $27.8 billion or 13 percent of a full-year demand to service disruptions caused by coronavirus outbreak.
In a statement endorsed by Alexandre de Juniac, the Director-General/Chief Executive Officer, IATA, the association said the impact of the virus would cause a 13-percent decline in passenger demand for carriers in the region.
Accordingly, the body said since growth projection for the region in 2020 was put at 4.8 percent, the impact will be an 8.2 percent full-year contraction compared to 2019 demand levels.
This, the association said would translate into $27.8 billion revenue loss in 2020 for the region. $12.8 billion of the total projected amount would be lost in China, the outbreak nation.
IATA said: “This would bring total global lost revenue to $29.3 billion , five per cent lower passenger revenues compared to what IATA forecast in December representing a 4.7 per cent hit to global demand.
“In December, IATA forecast global revenue per kilometre growth of 4.1 per cent , so this loss would more than eliminate expected growth this year, resulting in a zero point six per cent global contraction in passenger demand for 2020.
“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.
“These are challenging times for the global air transport industry. Stopping the spread of the virus is the top priority.
Airlines are following the guidance of the World Health Organisation (WHO) and other public health authorities to keep passengers safe, the world connected, and the virus contained.
“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.”