FLIGHT suspensions to mainland China and spooked travellers cancelling bookings over coronavirus has left the global aviation industry braced for $30bn (£23.3bn) in lost revenue, as the outbreak continues to savage the world economy.
Aviation body the International Air Transport Association (IATA), which represents the world's leading carriers, yesterday said combined airline revenues would drop five per cent from its December estimates.
The total fall in global demand will be 4.7 per cent, with passenger demand in the Asia-Pacific region to fall 13 per cent.
Asia-Pacific carriers will be the worst affected by the outbreak, with the majority of the cost — $27.8bn — borne by those in the region. China's domestic market alone will account for nearly half of this figure, with a $12.8bn drop in revenues forecast.
Alexandre de Juniac, IATA's director general, said the impact would be "severe" for those more exposed to the Chinese market.
"Airlines are making difficult decisions to cut capacity and in some cases routes. This will be a very tough year for airlines," he added.
IATA's estimate came as Air France-KLM and Qantas became the first carriers to report on the impact the illness could have on the bottom lines.
Shares in Air France-KLM slumped as much as 7.6 per cent yesterday, after the airline group warned the disease could wipe up to €200m (£167.4m) off earnings by April if flights remain suspended.
"Obviously, if it lasts longer, the impact will be heavier," its finance chief Frederic Gagey added.
Along with many global carriers, such as BA, Virgin Atlantic and Etihad, the Franco-Dutch group has cancelled flights to mainland China, which make up 5.5 per cent of its traffic, until the end of March.
BA yesterday announced extra flights to Miami and Seattle, using planes normally bound for China, until the end of May, a move which could be interpreted as it not expecting the flight ban to lift next month. Australian flag carrier Qantas said the outbreak would cost it as much as AU$150m (£77m) for this financial year, adding it would ground the equivalent 18 planes and ask its 30,000 staff to use up their annual leave to offset the fall in demand.
Last week Cathay Pacific, which plans to cut a third of its capacity over the next two months as well as 90 per cent of all flights to mainland China, warned that its first-half results would be "significantly down" after "the most challenging Chinese New Year period we have experienced".
(c) 2020 City A.M., source Newspaper