Airlines stand to lose tens of billions

WELLINGTON: Airlines stand to lose more than $45 billion of revenue this year because of the coronavirus outbreak, the global airline industry body has warned.

The International Air Transport Association (IATA) predicts demand for air travel will fall for the first time in more than a decade.

Airlines in China and other parts of the Asia Pacific region are expected to take the vast majority of the impact, the BBC reported.

Air New Zealand, China Southern, Sichuan Airlines, Air China, Hainan Airlines, Singapore Airlines and Cathay Pacific have all reduced or stopped flights to China.

Singapore Airlines and its subsidiary SilkAir announced on Thursday a temporary reduction in flights across their global network, starting on Monday through to May, due to ‘‘weak demand’’ as a result of the outbreak.

The carrier will reduce services to Frankfurt, New York, Tokyo, London, Los Angeles, Mumbai, Paris, Seoul and Sydney.

In total, airlines in the Asia Pacific region are set to lose nearly $43 billion in revenue in 2020, IATA has forecast.

Of that figure, IATA predicts China carriers are set to lose revenue of nearly $13 billion in their home market alone.

Forsyth Barr aviation analyst Andy Bowley, told RNZ a mix of government travel restrictions and the public’s reluctance to travel in the current health climate caused by the coronavirus outbreak had affected global travel, particularly as many transit hubs were Asianbased.

‘‘I hear it in the context of the business environment, where airlines make a fair bit of money from . . . customers at the front of cabin and there’s a distinct lack of a desire to travel to China or to Hong Kong or other Asia destinations currently, because of the uncertainty prevailing from a health point of view,’’ he said.

‘‘The New Zealand Government has travel restrictions in place for all foreign nationals that travel from or are transiting mainland China currently, so there is a distinct lack of demand as a result of that.’’

IATA directorgeneral Alexandre de Juniac said: ‘‘Airlines are making difficult decisions to cut capacity and in some cases routes . . . This will be a very tough year for airlines.’’

IATA said it had based its estimates on the slump in demand that was experienced during the Sars outbreak in 2003.

That was characterised by a sixmonth period when there was a sharp fall in demand followed by an equally quick recovery.

Four New Zealand passengers aboard Diamond Princess who have tested positive for coronavirus are in a stable condition in a Japanese hospital.

Directorgeneral of health Ashley Bloomfield said yesterday there were no confirmed coronavirus cases in New Zealand but he believed it was likely New Zealand would get a case ‘‘at some point’’.

It emerged on Thursday 12 evacuees from Diamond Princess were barred from boarding the emergency flight home.

Ten Australians and two New Zealanders tested positive for the Covid19 coronavirus just before they boarded the plane.

Earlier, two other New Zealanders were diagnosed with the disease. — RNZ/The New Zealand Herald /BBC