As Coronavirus (COVID-19) causes widespread disruption across the globe, the economic impact on the airlines industry has been significant. IATA announced at the beginning of March that it had doubled its previous estimate of the losses to $63 billion and to $113 billion if the virus continues to spread at the current rate.
Just last month, IATA estimated losses at $29.3 billion based on analysis that confined the virus and its economic impact on Chinese markets. Today, the Coronavirus is present in more than 80 countries and has affected the travel plans on a more global scale.
Share prices falling
Airlines had been enjoying a period of growth, investing in smarter technologies to cope with rising passenger numbers and looking ahead to future expansion. Many are resilient to the fact that numbers will return once the outbreak is under control, as they have done before following the SARS epidemic in 2003. However, currently average airline share prices have been falling since the crisis began and now stand at around 25% losses, far outweighing those during the SARS outbreak impact on airlines. With the recent news of the demise of Flybe, the budget airline from the UK, some industry experts are hoping that the governments of the world may step in and offer some support to their airlines to help them ride out the outbreak.
As the global public health emergency continues, the economic impact will change daily and airlines must be prepared to expect more turbulence ahead, at least for the short-term.
A message from A-ICE
Many nations are affected by the Coronavirus outbreak. We hope both our national and international clients and colleagues remain safe and unaffected. For further information about Coronavirus and what you can do to help minimize the risk of the spread of the disease, please visit the World Health Organization website here.