Coronavirus impact $29.3 billion in lost airline revenue
The International Air Transport Association (IATA) released a prediction on the impact of the recent breakout of COVID-19, or as it is better known, coronavirus. The virus, which is believed to have originated from Wuhan, China, has resulted in many airlines slashing their capacity to China.
Asia-Pacific based airlines are also facing a very steep hill in 2020, as IATA predicts that globally airlines would lose $29.3 billion of revenue due to the outbreak; $27.8 of that loss would be associated with airlines located in the region. The domestic China market alone would account for $12.8 billion of losses, stated the report.
Meanwhile, airlines that are outside of the region are predicted to bear $1.5 billion of the total loss of revenue. Globally, the demand for air travel is expected to shrink 4.7%, and with IATA’s previous prediction for the global demand growth of 4.1% in 2020, the coronavirus outbreak would result in the first shrink in Year-on-Year (YoY) passenger numbers since the global financial crisis in 2008.
It is becoming increasingly clear that Chinese carriers are bearing the brunt of the crisis, with the first rumored collapses as a result of the coronavirus outbreak coming out. Reportedly, HNA Group, which owns such carriers as Hainan Airlines and Hong Kong Airlines, is on the brink of a buyout from the Chinese government. The result of the buyout would be that the country’s three biggest airlines, namely Air China, China Southern Airlines (ZNH) and China Eastern Airlines (CIAH) (CEA) would split the assets from HNA’s liquidated airlines.
While most airlines have stopped flying to the region following governmental orders, a multitude of flights have been chartered to evacuate foreigners from China, including flights operated with such giants as the Airbus A380 and the Boeing 747.
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