Coronavirus spread caused heavy losses to air travel business
Air travel business to lose $113 billion
According to
the new analysis of International Air Transport Association (IATA) - the global
financial impact of COVID-19 (Coronavirus) could be up to $113 billion. The
people are traveling less as virus spreading to other countries and regions.
The airlines continue to lose passenger business as the result of COVID-19
spread.
In its
previous analysis last month-IATA predicted the loss of $29.3 billion based on
the assumption that the impact of COVID-19 would be 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.
IATA has
also revealed that shares of airlines have dropped up to 25% since the outbreak
of COVID-19 begun. The travel business experts are comparing this situation
with the beginning of world financial crises in 2008.
The COVID-19
is also impacting the Gulf airlines. The
Gulf airlines could lose up to$4.9 billion as passenger traffic continues to
drop. So far Gulf airlines lost 23% of passengers due to virus spread. Mostly
Asian airlines are suffering heavy losses as their passenger numbers have
slumped.
The National
airlines of Pakistan and India are expected to make even bigger losses. Air
India and Pakistan International Airlines (PIA) were both struggling to
overcome the heavy losses. The new restrictions imposed by many countries on
air travel will cause more losses for airlines and related businesses.
The IATA has
discussed two possible scenarios. The first includes markets with more than 100
confirmed COVID-19 cases experiencing a sharp downturn followed by a V-shaped
recovery profile resulting in a loss of $63 billion.
Scenario 2
applies a similar methodology but to all markets that currently have 10 or more
confirmed COVID-19 cases which could result in a loss in worldwide passenger
revenues of $113 billion.
Rukhsana Manzoor deputy editor
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