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Disastrous January load factors “tip of the iceberg” says IATA and forecasts losses from COVID-19 of $57.3 billion for the region’s airlines
March 6th 2020
The COVID-19 outbreak could cost the global airline industry up to US$113 billion, with losses at Asia-Pacific carriers revised upwards to a worst case scenario of $57.3 billion, the International Air Transport Association (IATA) said yesterday. Read More »
IATA predicted losses for the global industry of $63 billion if COVID-19 was contained and $113 billion where there was a wider spread. The forecast did not include the effect of the virus outbreak on the region’s air freight industry.
The impact on airline revenues in Australia, China, Japan, Malaysia, Singapore and South Korea could climb to $49.7 billion and for the rest of the Asia-Pacific $7.6 billion, IATA said.
Air passenger demand grew at its slowest pace for almost a decade in January as the coronavirus outbreak prompted people to stay home and airlines to curtail flights, new figures show.
IATA's monthly traffic report showed passengers carried, measured by revenue passenger kilometres (RPK), rose 2.4% in January, compared with the prior corresponding period. It was the lowest monthly increase since April 2010, when European skies were shut down due to the volcanic ash cloud.
And there is worse to come. IATA foreshadowed significant declines when February's figures were published as a result of COVID-19.
“January was just the tip of the iceberg in terms of the traffic impacts we are seeing owing to the COVID-19 outbreak, given that major travel restrictions in China did not begin until 23 January," IATA director general and CEO, Alexandre de Juniac, said in a statement on Wednesday.
"Nevertheless, it was still enough to cause our slowest traffic growth in nearly a decade."
De Juniac said the COVID-19 outbreak was a global crisis that tested the resilience not only of the airline industry but of the global economy. The IATA boss called on governments to support air transport links amid the unfolding crisis.
"Airlines are experiencing double digit declines in demand and on many routes traffic has collapsed," de Juniac said. "Aircraft are being parked and employees are being asked to take unpaid leave."
Capacity, measured by available seat kilometres (ASK), rose 1.7%. With demand growth ahead of capacity growth, load factors were up 0.6 percentage points in January at 80.3%.
Asia-Pacific carriers grew RPKs by 0.4% in January, while capacity increased 2.2%, IATA said. Load factors fell 1.5 percentage points to 79.9%.
The IATA report of March 4 said domestic demand in China tumbled 6.8% in January, reflecting the impact of flight cancellations and travel restrictions related to COVID-19.
China's domestic ASKs fell 0.2% with passenger load factor down 5.4% points to 76.7%. "China’s Ministry of Transport reported an 80% annual fall in volumes in late January and early February," IATA said.
Global air cargo volumes, measured by cargo tonne kilometres (CTK), were 3.3% lower in January compared with the prior corresponding period. It was the 10th consecutive month of year-on-year declines, IATA said.
IATA said the COVID-19 outbreak had severely disrupted global supply chains. And while the spread of the disease around the world did not have a major impact on the January figures, de Juniac said there were tough times ahead.
Asia-Pacific carriers suffered the most in January, with CTKs falling 5.9% in the month compared with a year earlier.
