The Covid-19 coronavirus will reduce global airline revenue
by $29.3 billion this year, according to a new IATA forecast. The drop would
accompany an overall contraction in global air demand for 2020, the first since
the global financial crisis of 2008-09.
IATA estimates that Covid-19 will drop passenger demand for
carriers in the Asia-Pacific region this year by 13% compared to its pre-virus
estimate of 4.8% growth. The result would be a net 8.2% contraction in
year-over-year Asia-Pacific demand.
IATA based the estimate on a scenario in which Covid-19
follows a similar arc to the SARS virus of 2003. SARS caused air traffic demand
in the Asia-Pacific region to decline sharply for six months. The drop was
followed by an equally sharp recovery. For that year, Asia-Pacific carriers
experienced a 5.1% drop in demand, as measured by the number of miles flown by
Of the $29.3 billion in lost revenue that IATA expects,
$27.8 billion would be lost by Asia-Pacific carriers. Of that, $12.8 billion
would be lost in the China domestic market alone. Carriers outside Asia are
forecast to see a revenue decline of $1.5 billion.
Worldwide, IATA had forecast demand for commercial air
service to grow 4.1% this year. The trade group now expects demand to be
depressed 4.7% by the virus outbreak, leading to a net year-over-year reduction
in demand for 2020.
“These are challenging times for the global air transport
industry. Stopping the spread of the virus is the top priority, IATA director
general Alexandre de Juniac said. “Airlines are following the guidance of the
World Health Organization and other public health authorities to keep
passengers safe, the world connected, and the virus contained.”