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The coronavirus outbreak could cost airlines up to $113 billion in lost revenue from declines in air travel in the spring and early summer, the International Air Transport Association said Thursday in a press release.
Why it matters: The IATA estimates that airlines could experience a 19% loss in passenger revenues if the virus extensively spreads in countries that now have 10 or more confirmed cases as of March 2.
- IATA assumes that the industry will recover in late summer or early fall.
- The IATA’s previous estimate in February put lost revenues at $29.3 billion based on a scenario in which the virus was confined to markets associated with China. Since that analysis, the virus has spread to more than 80 countries.
What they're saying: “The turn of events as a result of COVID-19 is almost without precedent," said Alexandre de Juniac, IATA’s director general and CEO. "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," Juniac said.
The big picture: Airlines are benefitting from lower oil prices, but also have had to reduce operation costs by cutting jobs, asking employees to take unpaid leave and limiting flights, according to AP.
- British regional airline Flybe announced Thursday that it would stop flying in part due to the virus' impact on air travel, the BBC reports.
- Axios' Marisa Fernandez reports that British Airways announced Monday that it will begin limiting London-New York flights to match low demand.
Go deeper: Coronavirus to deliver largest decline in international travel to U.S. since financial crisis