Coronavirus: Asian airlines set to lose US$27.8b as demand for flights shrivels amid outbreak
- Asia-Pacific carriers will suffer a 13 per cent decline in full-year passenger demand, global airline trade group says
- Airlines face tough choices on reducing flight schedules or cutting routes outright
Asian air travel is on course to shrink for the first time since 2003 as the deadly coronavirus outbreak could deprive the region’s airlines of US$27.8 billion (HK$216.3 billion) in revenues, according to the global airline trade body.
The International Air Transport Association (IATA) unveiled its first comprehensive forecast on Thursday showing the negative effect the disease, known as Covid-19, would have on air travel.
Asia-Pacific airlines would suffer the most, experiencing a 13 per cent decline in full-year passenger demand. As large numbers of people opt not to travel to and within the region, major airlines like Cathay Pacific, Singapore Airlines and Qantas have been forced to cut their flight schedules, affecting their profitability.
IATA said the worldwide revenue deficit would top US$29.3 billion, with US$12.8 billion shed in the collapsing Chinese domestic market. Mainland carriers lost a combined US$3.1 billion on international flights in 2018, relying on domestic services to prop up their expansionist ambitions.
“These are challenging times for the global air transport industry,” said Alexandre de Juniac, IATA’s director general and CEO. “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.”