The International Air Transport Association (IATA) said the impact of the Covid-19 could result in passenger airlines losing up to $113 billion in revenues this year. The updated forecast is almost four time the estimate from 13 days ago, reflecting the spread of the coronavirus outbreak in Europe.

IATA said with limited further spread of the virus, in markets with more than 100 currently confirmed Covid-19 cases, there could be a recovery that would lead to global losses being limited to $63bn this year, predominantly in the Asia-Pacific region. However, should similar patterns emerge in countries that currently only have 10 or more cases, IATA said the crash in revenues would reach the levels of the financial crisis, with Europe and the US being hit by huge losses as sales fall by 19%.

Airlines have grounded large parts of their fleet, cut routes and implemented emergency measures to cut costs. The collapse of Flybe, Europe’s largest regional carrier, came amid a drop in demand even on an airline far from the outbreaks. Alexandre de Juniac, IATA’s director general, said: “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. “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. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times.”

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