As COVID-19 continues to spread, the trade association for the world's airlines updated its impact assessment today. The International Air Transport Association (IATA) now sees global revenue losses for 2020 potentially hitting $113 billion for passenger airlines.
Just over two weeks after it released its last analysis, IATA now sees losses more than doubling the previous estimate, even in a scenario of COVID-19 containment. Further spreading of the virus could bring losses to the $113 billion figure.
The latest airline to suffer from the impacts of the coronavirus spread came overnight when British regional carrier, Flybe Airlines, entered Administration, grounding all flights and ceasing operations.
This comes on the heels of additional cancellation announcements by airlines such as American Airlines Group Inc. (NASDAQ:AAL), Delta Air Lines Inc. (NYSE:DAL), and United Airlines Holdings Inc. (NASDAQ:UAL).
American recently announced the suspension of flights to Soeoul, South Korea, and Milan, Italy, through April 25, 2020. United suspended some flights to Japan, Singapore and South Korea, after already suspending flights to China and Hong Kong through April, 2020. Delta also is reducing flights between the United States and Japan, effective through April.
These are just some of the markets seeing lost traffic. The IATA "limited spread" scenario equates to a loss of 11% of global passenger revenue due to the outbreak. The "extensive spread" outcome would be a loss of 19%, which would equal industry losses seen during the Global Financial Crisis.