One of the most badly hit sectors due to the coronavirus is the airlines industry. IATA today has called the corona effect on airlines revenue as the ‘deepest crisis’ faced by the airlines industry. With travel restrictions imposed all over the world, the airlines industry is going through one of its darkest phases in history. Today will look at how the coronavirus has affected airlines revenue.
Since the spread of coronavirus there has been a revenue fall in the airlines industry in 2020. On 20th February, the IATA had issued a notice analyzing a USD 29.3 billion loss in airlines revenue due to the corona effect. This analysis was based mainly on the impact of coronavirus on airlines market associated with China. By March it had spread worldwide. In mid-March the airlines revenue fall was expected by IATA to be around USD 113 billion. The revenue fall outcome of 19%loss in passenger revenue worldwide. Currently the number is said to have doubled. The IATA expects now a revenue fall of around USD 252 billion in 2020.
Travel around the world is hindered because of the coronavirus. The corona effect had led to a bad fall in airlines revenue across the world. Analysists are comparing this revenue fall of 2020 to the economic crash of 2008. The airlines revenue fall is something that people haven’t seen in aviation history. One of the main reasons is the corona effect in China. China is the second largest aviation hub in the world. In fact, it was expected to surpass US soon. But with flights to China being banned or cancelled, the airlines sector has been hit badly. President Trump has announced a travel ban adding to loss of flights in Europe.
The corona effect has led to airlines revenue fall also because of airport costs and maintenance of the aircraft. Airport parking, maintenance of planes, can cost thousands of USD per day. This adds to additional airlines revenue fall.
Governments of many countries have offered financial relief to its airlines sector, to help with the revenue fall. These include- Singapore, China, Hong Kong, Australia, Brazil, New Zealand, Qatar, Colombia, Sweden, Denmark, Norway, and Finland.
The IATA has also assessed the impact of coronavirus on airlines revenue in 2020 according to the different regions, as below-