As the deadly coronavirus spreads to over 70 countries, an industry body warned on March 5 that the airline industry could lose up to USD 113 billion in revenue in 2020 due to its impact. The International Air Transport Association (IATA) has estimated the revenue losses to airlines' passenger business of between USD 63 billion and USD 113 billion with the higher figure for a scenario where the COVID-19 spreads more widely around the globe.
IATA said that a more intense prediction would amount to 19 per cent loss in worldwide passenger revenues. It also added the cost of COVID-19 spread worldwide would be equivalent to what the industry experienced in the “global financial crisis”. It was comparatively a more bare assessment than what it released two weeks ago when it said that the revenue losses would come in at USD 29.3 billion. However, since then, the virus which had originated in China in late December has spread rapidly in other countries.
More than 96,000 people have been infected with the fatal virus worldwide and more than 3,300 people have died. After the meeting in Singapore, IATA head Alexandre de Juniac said that the all events in relation with the virus outbreak have been unprecedented and he called the turn of events as “dramatic” and that it is “for worse” of the industry. According to the official statement, Juniac also noted that many countries have cancelled flights and are reducing their capacity while taking emergency measures to reduce costs
IATA head said, “The turn of events as a result of COVID-19 is almost without precedent. In little over two months, the industry's prospects in much of the world have taken a dramatic turn for the worse."
“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies, “ he added.
Just recently, British Airways and budget rival Ryanair have cancelled hundreds of flights as demand for travel significantly dropped amid the worldwide fears of deadly coronavirus outbreak. According to reports, British Airways is cancelling 216 flights from March 16 to 28 from London to destinations including New York, Italy, France, Austria, Belgium, Germany, and Ireland. Meanwhile, Ryanair will cut up to 25 per cent of its flights in and out of Italy from March 17 to April 8 in the wake of coronavirus dread which has led to many tourists and business people cancelling their foreign travel.
This came as the British Prime Minister Boris Johnson had said that there could be “very significant expansion” of the number of confirmed cases of COVID-19 in the UK where at least 39 people have contracted the fatal virus. According to reports, Ryanair CEO Michael O'Leary said that the motto behind their recent move remains the safety of both, the passengers and employees. Furthermore, he has said that there has been a “notable drop” in forwarding bookings towards the end of March, into early April.