APAC air demand dwindles

AIRLINES in the Asia Pacific region are set to bear a combined US$27.8 billion loss in revenue in 2020 as a result of the coronavirus outbreak, the International Air Transport Association (IATA) warns.

An initial assessment of the impact of the virus on air travel in the region conducted by IATA found carriers could see passenger demand slump by 13% for the year compared to initial forecasts made prior to the outbreak.

“Considering that growth for the region’s airlines was forecast to be 4.8%, the net impact will be an 8.2% full-year contraction compared to 2019 demand levels,” IATA said in a statement.

“In this scenario, that would translate into a $27.8 billion revenue loss in 2020 for carriers in the Asia-Pacific region—the bulk of which would be borne by carriers registered in China, with $12.8 billion lost in the China domestic market alone.”

The IATA said the estimates were based on a scenario where the coronavirus has a similar V-shaped impact on demand as was seen during the SARS outbreak in 2003.

“That was characterised by a six-month period with a sharp decline followed by an equally quick recovery,” IATA said.

“The estimated impact of the COVID-19 outbreak also assumes that the centre of the public health emergency remains in China.

“If it spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger.

“It is premature to estimate what this revenue loss will mean for global profitability.”