The coronavirus has led to an estimated 13% full-year loss of passenger demand for airlines operating in the Asia-Pacific region, said the International Air Transport Association (IATA) Thursday.
According to IATA, the loss will translate into combined loss worth whopping $27.8 billion.
“This will be a very tough year for airlines,” IATA CEO Alexandre de Juniac said in a statement. “Stopping the spread of the virus is the top priority.”
This will be the first time since the SARS crisis of 2003 that demand for air travel has declined, De Juniac said.
Airlines in China’s domestic market alone are estimated to lose around $12.8 billion in revenues. Carriers outside the Asia-Pacific region are seen suffering $1.5 billion in losses. This brings the worldwide airline revenue lost to the virus to a projected $29.3 billion, IATA said.
However, if the virus spreads more widely to Asia-Pacific markets, the impact on airlines from other regions would be deeper, IATA warned.
IATA had previously estimated Asia-Pacific airlines to register growth of 4.8 percent this year, but they are now on course instead for a contraction of 8.2 percent, it said.
But there are some factors potentially softening the blow, IATA said.
“Governments will use fiscal and monetary policy to try to offset the adverse economic impacts. Some relief may be seen in lower fuel prices for some airlines, depending on how fuel costs have been hedged,” it said.
It was therefore difficult to predict by how much exactly lost revenue would weigh on profits.
But airlines are already taking “difficult decisions” to cut capacity, or even routes, IATA said.