The International Air Transport Association (IATA) updated its analysis of the financial impact of the novel Coronavirus (COVID-19) public health emergency on the global air transport industry. IATA now sees 2020 global revenue losses for the passenger business of between USD 63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of March 2) and USD 113 billion (in a scenario with a broader spreading of COVID-19). No estimates are yet available for the impact on cargo operations.
IATA’s previous analysis (issued on February 20, 2020) put lost revenues at USD 29.3 billion based on a scenario that would see the impact of COVID-19 largely confined to markets associated with China. Since that time, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China.
Financial markets have reacted strongly. Airline share prices have fallen nearly 25 per cent since the outbreak began and some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003. To a large extent, this fall already prices in a shock to industry revenues much greater than our previous analysis.