The COVID-19 coronavirus will reduce global airline revenue by $29.3 billion this year, according to a new IATA forecast. The drop would accompany an overall contraction in global air demand for 2020, the first since the global financial crisis of 2008 to 2009.
IATA estimates that COVID-19 will drop passenger demand for carriers in the Asia Pacific region this year by 13% compared to its pre-virus estimate of 4.8% growth. The result would be a net 8.2% contraction in year-over-year Asia Pacific demand.
IATA based the estimate on a scenario in which COVID-19 follows a similar arc to the SARS virus of 2003. SARS caused air traffic demand in the Asia Pacific region to decline sharply for six months. The drop was followed by an equally sharp recovery. For that year, Asia Pacific carriers experienced a 5.1% drop in demand, as measured by the number of miles flown by paying passengers.
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Of the $29.3 billion in lost revenue that IATA expects, $27.8 billion would be lost by Asia Pacific carriers. Of that, $12.8 billion would be lost in the China domestic market alone. Carriers outside Asia are forecast to see a revenue decline of $1.5 billion.
Worldwide, IATA had forecast demand for commercial air service to grow 4.1% this year. The trade group now expects demand to be depressed 4.7% by the virus outbreak, leading to a net year-over-year reduction in demand for 2020.
“These are challenging times for the global air transport industry. Stopping the spread of the virus is the top priority, IATA director general Alexandre de Juniac said. “Airlines are following the guidance of the World Health Organization and other public health authorities to keep passengers safe, the world connected, and the virus contained.”
* This article originally appeared on Travel Weekly