Global aviation body the International Air Transport Association (IATA) has today said that the coronavirus outbreak will cost the world’s airlines a combined $29.3bn in revenue, a reduction of five per cent on December’s estimates.
The vast majority of the cost – $27.8bn – will be borne by carriers based in the Asia-Pacific, with Chinese domestic airlines losing $12.8bn alone.
The illness, which originated in China’s Hubei province over the New Year, has now killed over 2,000 people and had a sizeable impact on the global economy.
IATA’s announcement comes as Air France-KLM and Qantas became the first airlines to report on the impact the illness has had on their businesses.
Air France-KLM saw its shares fall 7.6 per cent this morning after the airline warned it could wipe up to €200m (£167.4m) off earnings by April if flights remain suspended.
Like many global carriers, the Franco-Dutch group has cancelled flights to mainland China, which make up 5.5 per cent of its traffic, until the end of March.
The outbreak came just as Air France-KLM was expecting a pick-up in 2020 due to an easing of global trade tensions.
Finance chief Frederic Gagey told reporters: “That’s the hypothesis we’re using for the moment but we don’t know how credible it is. Obviously if [the coronavirus] lasts longer, the impact will be heavier.”
As the first of the global European carriers to report its results, other airlines will be watching Air France-KLM closely for indications of the effect of the coronavirus on the aviation industry.
Many international airlines, such as British Airways, United Airlines, Qatar Airways and Iberia have suspended flights to mainland China as a result.
Australian flag carrier Qantas said that the outbreak would cost it between AU$100m and AU$150m for this financial year as it tackles a drop in demand.
The company released its strategy to handle the outbreak today, saying that it would ground the equivalent 18 planes and ask its 30,000 staff to use up their annual leave to offset the fall.
Chief executive Alan Joyce said that the illness could be managed for six months before job cuts were necessary.