ICAO predicts $4-5bn Q1 airline revenue hit from virus

14 Feb 2020

ICAO, the UN’s International Civil Aviation Organisation, has forecast global airline revenue could decline by $4-5 billion in Q1 as a result of flight cancellations due to coronavirus.

Earlier this week the agency, based in Montreal, said the virus was predicted to have a much larger effect on the industry than was caused back in 2003 with the Severe Acute Respiratory System (SARS) epidemic. This is down to the higher volume and global reach of the flight cancellations.

According to the ICAO news release: “The agency noted that COVID-19 (travel ban) impacts are expected to be greater than those caused by the 2003 SARS epidemic, in light of the higher volume and greater global extent of the flight cancellations being seen. Seasonal passenger load factors are another extenuating factor, as is the fact that China’s international air traffic has doubled, and its domestic traffic increased five-fold, since the 2003 period.
 
“ICAO stressed that these are preliminary figures and forecasts, and that they do not yet take into account the more comprehensive assessments of direct and indirect COVID-19 economic impacts which will eventually be determined,” it added. 

Approximately 70 airlines have cancelled all international flights to and from mainland China, with an additional 50 airlines reducing operations, according to the International Civil Aviation Organisation.

This has resulted in an 80% fall in foreign airline capacity for people travelling to and from China, as well as a 40% fall in capacity by Chinese airlines, the ICAO added.

The initial estimate does not take into account potential effects on airports, cargo-only aircraft, air navigation service providers, domestic air traffic in China or international traffic in relation to Hong Kong, Macau and Taiwan, the ICAO added.

Moreover, the agency forecast Japan could lose $1.29 billion of tourism revenue in Q1 because of the fall in Chinese travellers, whilst Thailand could lose around $1.15 billion.

 

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