The International Air Transport Association (IATA) has announced a dramatic increase in the damage of the coronavirus to the global airline industry.
It said the losses in sales could reach up to $113 billion if Coronavirus Disease 2019 (COVID-19) continues to spread. This amount is way too high from what IATA previously expected in lost sales that would only range to $30 billion.
“The turn of events as a result of [the coronavirus] 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,” said IATA’s Director General and CEO Alexandre de Juniac.
The hundreds of billions damage, which translates to 19% of worldwide passenger revenue loss, could be similar to that experienced during the 2008 global financial crisis.
Travel bans to and from mainland China and the lack of passengers due to growing fears over the deadly virus have encouraged several international carriers to limit their operations.
Several flights within Asia, as well as Europe and America, have also been curtailed.
On Thursday, British’s largest independent regional airline Flybe has collapsed following significant funding challenges to its business that has been worsened by the virus impact.
All booked flights on the Exeter-based airline have been canceled and more than 2,300 employees were left at risk.
“It would be no surprise if there are more collapses with a prolonged Covid-19 outbreak. People are just cutting back on air travel despite airlines offering discounts on airfares,’’ an IATA executive said.
The industry group said it is looking for stimulus measures and might consider asking for financial assistance from the governments if the outbreak lasts longer.