Coronavirus – Heavy blow for airlines

The history of mankind has been filled with many temptations. The onset of diseases that are highly contagious and rapidly spreading is certainly one of such temptations. These days we are witnessing the emergence of a Coronavirus that has plagued all humanity. Certainly its consequences, in addition to health, will be reflected in the global economy.

The World Health Organization has officially declared a global pandemic of the virus corona. Pandemic is not a word to use easily or hastily. It is a word that, if abused, can cause exorbitant fear, or unjustified reception that the fight is over, leading to avoidable suffering and death. In the days and weeks ahead, we expect to see the number of cases, the number of deaths, and the number of affected countries climb even higher.

The aviation industry, especially commercial aviation, is one of the branches of the industry that will suffer the greatest losses in the new situation. The consequence of the coronavirus outbreak in the aerospace industry has been huge. What endures unknown is how long and how widespread the virus’ range will proceed.

The International Air Transport Association (IATA) predicted that falling passenger demand as a consequence of the outbreak of the Covid-19 virus would cost the airline industry $29.3bn in lost revenues this year. As a result of the outbreak of the epidemic, President of the United States, Donald Trump, bans travel from Europe for 30 days over coronavirus outbreak. The ban on travel from Europe went into effect Friday, March 13 at Midnight and does not include Britain, Ireland, Scotland, Northern Ireland or Wales. 

It is very difficult for the airlines because there’s nothing they can do. They cannot lower prices to stimulate demand at this point. So what airlines will do is drastically decrease schedules, start cost restructuring measures and then looking at who is levered in what way. Difficult decisions to cut capacity and in some cases routes will lower fuel costs and will help balance some of the lost revenue.

The mere reduction of air traffic to and from China carried enormous losses. Contemporary data confer a 2.8 percent fall in global aircraft capacity this year. The huge majority of the financial influence will hit airlines in the Asia Pacific region, where revenues will fall by $27.8bn, with the most produced by carriers registered in China. IATA estimates that losses in China’s domestic market will hit $12.8bn. Carriers outside the Asia Pacific are forecast to lose about $1.5bn this year. These are figures that certainly indicate a blow that will leave permanent holdings on commercial aviation.

According to IATA’s director-general, Alexandre de Juniac, this crisis is rippling across the air transport network globally, even between countries without major outbreaks of Covid-19. De Juniac said airlines were “on the frontline of the challenge” to prevent the spread of Covid-19 while keeping the global economy functioning.

All thoughts and efforts are currently focused on areas affected by the virus.  The struggle to preserve each life is a priority. Therefore, the story of the economy cannot currently be at the forefront. But we certainly need to be aware of the negative impact these events will have on the global economy and the quality of life once the threat of the virus has passed.

However, we must be aware that once the pandemic has passed, people will have to return to normal life. We all want to get back to shaking hands and meeting. On this side, there is no doubt that air travel would rebound relatively quickly.

Being in the prayers for all people affected by this pandemic, Poente Technical is here to keep you updated on the most important aviation news and stories.