Coronavirus could cost the airline industry more than $30 billion by 2020. That is indeed what the International Air Transport Association announced this morning. The press release issued on Friday 21 February mentions the possibility of the first worldwide drop in air bookings since the SARS crisis in 2003. Let's discover together the details of this news.
In a press release published on Thursday 21 February, the International Air Transport Association or IATA explained that the Chinese Coronavirus epidemic could cost airlines nearly 30 billion euros in 2020. 27.8 billion of this amount would concern companies operating in Asia-Pacific.
This shortfall is, of course, due to the restrictions linked to this virus and to the drop in the number of passengers, which is estimated at more than 8.2% for the current year compared to 2020 and for this region. If we add to this the likely impact on airlines in the rest of the world, which is estimated at nearly 1.5 billion euros, total losses should approach 29.3 billion, as the association points out. It also indicates that this is expected to be a particularly challenging period for the global airline industry.
Also as part of its announcement, the association expresses its concern that the coronavirus crisis could lead to a reduction in the number of bookings for the year.the industry is expected to be the largest in the world by 2020, a first since 2003 and the crisis that hit the industry at that time with the SARS epidemic. The Director General of the International Air Transport Association said: "We estimate that global traffic will be reduced by 4.7% by the virus, which could more than wipe out the growth we had previously forecast.This situation will have a financial impact on airlines that will be severe for those particularly exposed to the Chinese market, and governments have an important role to play in this crisis".
Among the airlines expected to be most affected in 2020 are of course Air France KLM, but also British Airways, Air Canada, Lufthansa and Delta, which have already suspended their flights to mainland China.
The Air France KLM group already estimated yesterday that the loss of revenue due to the suspension of flights to this destination would be between EUR 150 and 200 million.
It should also be remembered that the coronavirus epidemic began in the Wuhan region in central China and has already claimed more than 2,100 lives since its detection, including 8 outside Chinese territory. Currently, more than 74,500 people have been infected with the virus.