The economic impact that the outbreak of the coronavirus, COVID-19, could cause losses of up to 113 billion dollars to commercial passenger aviation, according to the International Air Transport Association (IATA).
“IATA estimates that the losses in global earnings by 2020 for the commercial passenger aviation business will be between 63 billion dollars and 113 billion dollars.”
The previous analysis of IATA, published on February 20, indicated that the impact could be 29.3 billion dollars. However, since then, COVID-19 has expanded to more than 80 countries, impacting routes, and sales beyond China.
“Many airlines are cutting their capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat. Governments should take stimulating measures and consider support for taxes, charges, and slots. These are extraordinary times, ”said Alexandre de Juniac, general director of IATA.
During these weeks, the price of airline shares has fallen to 25%, which implies 21% more than what happened during the SARS crisis in 2003.
In a scenario of a broad impact, the most affected markets will be those in Australia, China, Japan, Malaysia, Singapore, South Korea, Thailand, and Vietnam, with losses of 49.7 billion dollars and a 23% drop in demand.
The fall in demand in Austria, France, Italy, Germany, the Netherlands, Norway, Spain, Switzerland, Sweden, and the United Kingdom would be higher, 24%. Still, the losses would be around 37.3 billion dollars.
Canada and the United States could have losses of up to 21.1 billion dollars and a 10% drop in demand.
Until now, IATA has not considered a financial or demand impact in Latin America as a result of the coronavirus. However, the Latin American region has had four consecutive months of falling demand for international flights as a result of political instability in certain countries.