Airlines lose around $113 bn over nCoV, IATA calls ‘crisis unprecedented’

New Delhi: With coronavirus infections spreading to nearly 80 countries severely hurting the travel and tourism sector, global industry body International Air Transport Association (IATS) has estimated the combined revenue loss for airlines in the range of $63-113 billion.

In its latest financial impact of novel Coronavirus (COVID-19) on airline sector, IATA now sees 2020 global revenue losses for the passenger business of $63 billion considering infection is contained in countries with over 100 cases as of March 2.

This scenario considers markets with more than 100 confirmed COVID-19 cases and experiencing a sharp downturn followed by a V-shaped recovery profile.

In case the virus spreads further covering more markets, the losses could almost double to $113 billion thus further affecting the financial health of airlines worldwide.

The projected loss is on account of passenger traffic and does not include cargo operations.

According to the industry body which represents some 290 airlines comprising 82 per cent of global air traffic, financial markets have reacted strongly to the latest coronavirus related developments.

“Airline share prices have fallen nearly 25 per cent since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003,” IATA said.

The aviation markets that would take major hit include Australia, China, Japan, Malaysia, Singapore, South Korea, Thailand and Vietnam.

“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. It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis,” said Alexandre de Juniac, IATA’s Director General and CEO.

The IATA Chief said that the government would need to provide stimulus measures in terms of lowering the taxes and charges to help the airlines tide over the crisis.

As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times,” said IATA DG and CEO.

IANS