Mar 5, 2020 - Economy & Business

Air-travel industry group: Coronavirus could cost airlines $113B

Photo: Marina Lystseva\TASS via Getty Images

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

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Coronavirus rattles travelers — and airlines

Illustration: Sarah Grillo/Axios

Not since the aftermath of 9/11 has there been such a fear of flying.

Why it matters: The novel coronavirus has the airline industry bracing for the worst downturn since the Great Recession. Even though the government says it's safe to fly domestically, the drumbeat of news about COVID-19 has cautious employers stifling business travel and worried families rethinking their summer vacation plans.

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Southwest Airlines CEO compares coronavirus travel declines to post-9/11

Gary Kelly, CEO of Southwest Airlines in Annapolis, Maryland in 2018. Photo: Alex Wroblewski/Getty Images

Southwest Airlines CEO Gary Kelly said on Thursday that the drop in domestic air travel amid the novel coronavirus outbreak "has a 9/11-like feel," CNBC anchor Carl Quintanilla reports.

Driving the news: The spread of COVID-19 could cost airlines up to $113 billion in lost revenue due to declines in air travel this spring and early summer, the International Air Transport Association projected earlier on Thursday.

Go deeperArrowMar 5, 2020 - Health

United Airlines cutting April flights amid coronavirus fears

Photo: Daniel Slim/AFP via Getty Images.

United Airlines will be cutting flights in April due to slowed demand amid growing fears over the novel coronavirus, per CNBC.

Where it stands: International flights will be cut by 20% and domestic flights by 10%. The rollback comes as coronavirus has spread worldwide since January — largely due to international travel stemming from Wuhan, China, and other sites of major outbreaks, including Italy and Iran.

Go deeperArrowMar 4, 2020 - Health