IATA: Losses from Wuhan coronavirus will be between $63 and $113 billion
Topics: IATA WUHAN CORONAVIRUS
IATA now sees 2020 global revenue losses for the passenger business of between $63 billion in a scenario where Wuhan coronavirus is contained in current markets with over 100 cases as of 2 March and $113 billion in a scenario with a broader spreading of Wuhan coronavirus.
No estimates are yet available for the impact on cargo operations.
Scenario 1: Limited Spread
This scenario includes markets with more than 100 confirmed Wuhan coronavirus as of 2 March experiencing a sharp downturn followed by a V-shaped recovery profile.
It also estimates falls in consumer confidence in other markets North America, Asia Pacific and Europe.
The markets accounted for in this scenario and their anticipated fall in passenger numbers, due to Wuhan coronavirus, as are as follows: China (-23%), Japan (-12%), Singapore (-10%), South Korea (-14%), Italy (-24%), France (-10%), Germany (-10%), and Iran (-16%).
Additionally, Asia (excluding China, Japan, Singapore and South Korea) would be expected to see an 11% fall in demand.
Europe (excluding Italy, France and Germany) would see a 7% fall in demand and Middle East (excluding Iran) would see a 7% fall in demand.
Globally, this fall in demand translates to an 11% worldwide passenger revenue loss equal to $63 billion.
China would account for some $22 billion of this total.
Markets associated with Asia including China would account for $47 billion of this total.
Scenario 2: Extensive Spread
This scenario applies a similar methodology but to all markets that currently have 10 or more confirmed Wuhan coronavirus cases as of 2 March.
The outcome is a 19% loss in worldwide passenger revenues, which equates to $113 billion.
Financially, that would be on a scale equivalent to what the industry experienced in the Global Financial Crisis.
Africa and Latin America/Caribbean regions are not explicitly included in this market-based analysis, because there are currently no countries in either region with at least 10 Wuhan coronavirus cases.
The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in cargo tonne kilometers (CTKs), decreased 3.3% in January 2020, compared to the same period in 2019.
Cargo capacity, measured in available cargo tonne kilometers (ACTKs), rose 0.9% year on year in January 2020.
Capacity growth has now outstripped demand growth for 21 consecutive months.
It is unlikely that Wuhan coronavirus outbreak had very much to do with January’s weak performance.
Lunar New Year in 2020 was earlier than in 2019.
This skewed 2020 numbers towards weakness as many Chinese manufacturers would be closed for the holiday period.
February performance will give a better picture of how Wuhan coronavirus is impacting global air cargo. ■