Coronavirus outbreak to cost airlines almost $30bn

Airline industry body IATA predicts global air travel demand will fall for the first time since 2009.

Coronavirus outbreak to cost airlines almost $30bn
Photo: Reuters

Airlines stand to lose $29.3bn (£23.7bn) of revenue this year due to the coronavirus outbreak, the global airline industry body has warned.

The International Air Transport Association (IATA) predicts demand for air travel will fall for the first time in more than a decade.

Airlines in China and other parts of the Asia Pacific region are expected to take the vast majority of the impact.

It comes as carriers around the world have been forced to reduce flights.

In total, airlines in the Asia Pacific region are set to see a $27.8bn revenue loss in 2020, while those outside Asia are expected to lose $1.5bn in revenue, IATA has forecast. 

Of that figure, IATA predicts that carriers in China are set to lose revenue of $12.8bn in their home market alone.

"Airlines are making difficult decisions to cut capacity and in some cases routes," said IATA's director-general Alexandre de Juniac. "This will be a very tough year for airlines."

However, IATA cautioned it was too early to predict what this expected revenue loss would mean for airlines' profitability this year.

 

IATA said it had based its estimates on the slump in demand that was seen during the Sars (severe acute respiratory syndrome) outbreak in 2003. That was characterised by a six-month period that saw a sharp fall in demand followed by an equally quick recovery.

That year Sars was responsible for the 5.1% fall in demand for airlines in the Asia-Pacific region.

The forecast also assumes that the virus remains centred on China, but IATA warned the effect could be far worse if the infection spreads further in the region.

IATA has previously forecast that the Asia Pacific region would be the biggest driver of air travel demand between 2015 and 2035, with four of the five fastest-growing markets in terms of passengers being from Asia.

On Thursday, two major airline groups warned of a severe financial impact as a result of the coronavirus hitting demand for travel in Asia.

Australia's Qantas said the outbreak would cost it up to 150m Australian dollars ($99m; £76m), while European carrier Air-France KLM put the cost at up to €200m ($213m; £168m) for the period between February and April. BBC

Qantas warns coronavirus impact could hit $99m

Qantas warns coronavirus impact could hit $99m

The warning comes as concerns grow over the impact of the outbreak on airlines and the global economy.

Coronavirus may lower Vietnam’s State budget by VND42.3 trillion: ministry

Coronavirus may lower Vietnam’s State budget by VND42.3 trillion: ministry

The State budget may face a shortfall of some VND42.3 trillion (US$1.8 billion) this year due to the ongoing spread of the novel coronavirus, or Covid-19, according to the Ministry of Planning and Investment.  

 
 

Other News

.
Mekong Delta faces rice crisis as exports are interrupted
Mekong Delta faces rice crisis as exports are interrupted
BUSINESSicon  01/04/2020 

Hundreds of thousands of tons of rice in Mekong Delta remain unsold as merchants have stopped collecting rice. Farmers fear the rice price will drop dramatically if Vietnam stops exporting rice.

Exports suffer during Covid-19 crisis as orders are cancelled or delayed
Exports suffer during Covid-19 crisis as orders are cancelled or delayed
BUSINESSicon  01/04/2020 

Some countries have temporarily closed shopping centers and asked people to stay at home to prevent the spread of coronavirus, which has affected exports of Vietnamese enterprises.

Food processing firms step up production, focus on safety measures for workers
Food processing firms step up production, focus on safety measures for workers
BUSINESSicon  31/03/2020 

Food processing firms in Ho Chi Minh City have stepped up production to meet demand while also enhancing safety measures for their staff amid the Covid-19 pandemic.

Fresh fruit exported to China in refrigerated containers
Fresh fruit exported to China in refrigerated containers
BUSINESSicon  31/03/2020 

Export of fresh fruit to China via train using refrigerated containers has contributed to curbing the spread of the COVID-19 pandemic.

Business survey to begin on April 1
Business survey to begin on April 1
BUSINESSicon  31/03/2020 

The General Statistics Office (GSO) is scheduled to begin a survey of businesses on April 1 with a view to collecting basic information to serve management and policy making, Deputy General Director of the office Nguyen Trung Tien said.

Vietnam Airlines increases cargo transport to ensure trade
Vietnam Airlines increases cargo transport to ensure trade
BUSINESSicon  31/03/2020 

The national flag carrier Vietnam Airlines has committed to intensifying the operation of freight flights, both domestically and internationally, amid the outbreak of the COVID-19 pandemic.

Nearly 16,200 online stores sanctioned for profiting from COVID-19
Nearly 16,200 online stores sanctioned for profiting from COVID-19
BUSINESSicon  31/03/2020 

The Ministry of Industry and Trade has been cracking down on profiteers for selling face masks, hand sanitisers and other items for inflating prices due to the high demand caused by the ravaging COVID-19 epidemic.

Halting rice exports to stabilise food supplies
Halting rice exports to stabilise food supplies
BUSINESSicon  31/03/2020 

The Vietnamese government has asked rice exporters to temporarily suspend signing new export contracts in a bid to increase stockpiles and ensure the country’s food supply.

Beer brewers foresee 30-70 per cent drop in profit due to COVID-19
Beer brewers foresee 30-70 per cent drop in profit due to COVID-19
BUSINESSicon  31/03/2020 

The dual pressures from COVID-19 and Decree 100 force beer manufacturers to cut 30-70 per cent of their target profits this year.

Vinatex faces damage of $43 million due to COVID-19
Vinatex faces damage of $43 million due to COVID-19
BUSINESSicon  31/03/2020 

Even if COVID-19 is brought under control by May, the textile and garments industry will take a damage of $480 million, with Vinatex taking $43 million.

Up to 18,600 firms suspend operations in Q1 due to COVID-19
Up to 18,600 firms suspend operations in Q1 due to COVID-19
BUSINESSicon  31/03/2020 

Up to 18,600 businesses were forced to suspend operations in the first quarter of 2020 due to the COVID-19 pandemic, up 26 percent year on year, reported the General Statistics Office (GSO).

Coronavirus: Amazon workers threaten strikes over virus protection
Coronavirus: Amazon workers threaten strikes over virus protection
BUSINESSicon  31/03/2020 

Some US workers at Amazon and Instacart are threatening to strike over inadequate coronavirus protections.

Aerospace components manufacturing plant inaugurated in Da Nang
Aerospace components manufacturing plant inaugurated in Da Nang
BUSINESSicon  31/03/2020 

The Sunshine aerospace components manufacturing facility was recently inaugurated in the central city of Da Nang, according to the Da Nang Hi-Tech Park and Industrial Zones Authority.

Toyota Motor Vietnam suspends vehicle production
Toyota Motor Vietnam suspends vehicle production
BUSINESSicon  31/03/2020 

Toyota Motor Vietnam (TMV) suspended vehicle production on March 30.

European Council passes final procedure for EVFTA
European Council passes final procedure for EVFTA
BUSINESSicon  31/03/2020 

The European Council on March 30 passed a decision to ratify the EU-Vietnam Free Trade Agreement (EVFTA), paving the way for the deal to come into force.

Large corporations face hardships amid COVID-19 crisis
Large corporations face hardships amid COVID-19 crisis
BUSINESSicon  31/03/2020 

The managers of Sun Group, BRG and Vietjet, speaking at a meeting with Prime Minister Nguyen Xuan Phuc in mid-March, said they were facing difficulties.

Staff at many firms work from home
Staff at many firms work from home
BUSINESSicon  31/03/2020 

Many enterprises, in an effort to prevent the spread of COVID-19, have asked staff to work from home.

Catfish farming in danger, farmers leave ponds idle
Catfish farming in danger, farmers leave ponds idle
BUSINESSicon  31/03/2020 

Catfish exports to China dropped by half in the first two months of the year in comparison with the same period last year, resulting in a 32 percent decrease in total export turnover for the entire seafood industry.

Disbursement of public investment would help lift Vietnam's GDP by 0.42 percentage points
Disbursement of public investment would help lift Vietnam's GDP by 0.42 percentage points
BUSINESSicon  30/03/2020 

Boosting the disbursement of all planned public investment would help increase this year’s gross domestic product (GDP) by 0.42 percentage points, according to the General Statistics Office (GSO).

Kien Giang, Long An provinces want rice export ban lifted
Kien Giang, Long An provinces want rice export ban lifted
BUSINESSicon  30/03/2020 

The Mekong Delta provinces of Kien Giang and Long An have asked the Government to reconsider its temporary ban on rice exports, saying it would discourage farmers from growing the autumn-winter crop this year.

 
 
 
Leave your comment on an article

OR QUICK LOGIN