Outbreak a big blow for airlines

Coronavirus fears are set to cause the first fall in global air travel in more than a decade, experts say.

Unwillingness or an inability to fly will bring about a 4.7 per cent reduction in sales worldwide and cost the industry NZ$48 billion, as demand slumps to levels not seen since 2008 after the global financial crash, the International Air Transport Association (IATA) has predicted.

Countries in Asia and further afield have imposed restrictions on travellers who have recently been to Hubei province, the centre of the outbreak, or elsewhere in China.

According to the IATA’s forecast, the bulk of the financial impact will be felt by airlines in East Asia, where revenues will fall by NZ$43.6b, most of which – an estimated NZ$20b – will be borne by Chinese carriers.

Alexandre de Juniac, director-general of the IATA, said 2020 would be a ‘‘very tough year’’ for the aviation industry because of the virus, also known as Covid-19.

‘‘These are challenging times for the global air transport industry,’’ he said. ‘‘Stopping the spread of the virus is the top priority. The sharp downturn in demand as a result of Covid-19 will have a financial impact on airlines.

‘‘Airlines are making difficult decisions to cut capacity and, in some cases, routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year.’’

Global epidemics have a history of disrupting demand for air travel.

The outbreaks of bird flu, in 2005 and 2013, and Mers (Middle East respiratory syndrome) in 2015, resulted in industry losses, but it was Sars (severe acute respiratory syndrome) in 2003 that caused the biggest decline in air travel.

At the height of the Sars outbreak in May 2003, passenger numbers on AsiaPacific airlines were about 35 per cent lower than their precrisis levels.