COVID-19 may cause $113B loss to airline sector
In a statement, the association said the shrinking passenger demand due to a global rise in infections could push revenues down by 19%, Anadolu Agency reports.
IATA updated its previous analysis it issued on Feb. 20 as the virus spread to at least 80 countries and forward bookings have been severely impacted on routes beyond China.
In a limited spread scenario where COVID-19 is contained in current markets with over 100 cases, the air passenger business may loss $63 billion, corresponding to an 11% decrease, it said, adding: «China would account for some $22 billion of this total.»
Pointing to financial markets' response to the epidemic, IATA said airline share prices had fallen nearly 25% since last December when the virus surfaced in Wuhan, China.
A $13 fall in oil prices since the beginning of the year will provide some offset with lower costs, it added.
«This could cut costs by up to $28 billion on the 2020 fuel bill which would provide some relief but would not significantly cushion the devastating impact that COVID-19 is having on demand,» IATA said.
The global death toll from the virus is over 3,200, with more than 95,000 confirmed cases, according to the World Health Organization (WHO).
The WHO, which had declared the outbreak an international health emergency, recently updated the global risk assessment to «very high». It has advised travelers who are sick to delay or avoid travel to affected areas.
Travelers returning from affected areas have been recommended to self-monitor for symptoms for 14 days. Common signs of the infection include fever, cough, shortness of breath and breathing difficulties.
The nations worst affected include Iran and Italy. Both the countries, besides other measures, have closed all schools and universities until at least mid-March.