Asian airlines could lose US$27.8 bln revenue due to virus: IATA

February 21, 2020 09:22
Air passenger traffic in the Asia-Pacific region could fall by 8.2 percent this year in the wake of the coronavirus outbreak, according to IATA. Photo: Reuters

Airlines in the Asia-Pacific region stand to lose US$27.8 billion of revenue this year as they slash flights due to declining demand as a result of the coronavirus, an industry body has estimated, Reuters reports.

The bulk of the losses will be borne by Chinese carriers, including a US$12.8 billion hit to the Chinese domestic market alone, the International Air Transport Association (IATA) was quoted as saying in a forecast released in New York on Thursday.

Chinese airlines have cut 80 percent of their planned capacity to, from and within China this week, according to flight data firm OAG, as they grapple with a sharp fall in demand due to the virus that has killed more than 2,100 people in China.

Asian hub carriers Cathay Pacific Airways and Singapore Airlines have cut capacity across their global networks as they look to manage the crisis.

Overall, IATA expects passenger traffic in the Asia-Pacific region to fall by 8.2 percent this year, compared to an earlier estimate of a 4.8 percent rise.

"Airlines are making difficult decisions to cut capacity and in some cases routes,” IATA Director General Alexandre de Juniac said in a statement. "Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines."

Carriers outside Asia are expected to lose US$1.5 billion of revenue due to the virus, IATA said, adding that it is too early to quantify the impact on earnings.

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