IATA says Chinese flight market to see losses of over $10 billion

Source:Global Times Published: 2020/2/24 18:16:54

An Air China flight takes off at the Daxing International Airport in Beijing, capital of China, on September 25, 2019. (Xinhua/Zhang Chenlin)

The International Air Transport Association (IATA) has predicted that China's domestic flight market could see losses of $12.8 billion, impacted by COVID-19, and the Asia-Pacific region could see a $27.8 billion revenue loss in 2020 for carriers. 

As growth for the region's airlines was forecast at 4.8 percent, IATA said the net impact will be an 8.2 percent full-year contraction compared to 2019 de-mand levels, with a potential 13 percent full-year passenger demand loss for carriers in the Asia-Pacific region.

In the same scenario, carriers outside the Asia-Pacific region were forecast to bear a revenue loss of $1.5 billion. 

"These are challenging times for the global air transport industry," Alexandre de Juniac, IATA's Di-rector General and CEO said in a press release sent to the Global Times.

Challenged by the market, flight ticket prices for ma-jor routes in China are going down.

On Ctrip.com, a Tuesday flight from Beijing to Shanghai is priced at a low of 400 yuan ($56) and a high of 800 yuan, compared to 1,200 yuan before the virus hit. 

China Eastern Airlines' January data showed that passenger turnover on Chinese mainland and re-gional routes decreased 4.91 percent and 29.89 percent year-on-year respectively. 

China Eastern Airline said that the company had suspended or adjusted some routes based on mar-ket demand and the impact of the COVID-19 epi-demic.

China Southern Airlines' announcement earlier in February revealed that in January, the passenger turnover for China Southern Airlines and its subsidi-aries decreased 2.42 percent year-on-year. Domes-tic travel declined 4.64 percent and regional travel 44 percent.

The Civil Aviation Administration of China (CAAC) said the nation's air transport market in January posted negative growth due to the impact of the epi-demic.

In January, the total transportation turnover was 10.1 billion ton-kilometers, a year-on-year decrease of 4.9 percent. 50.6 million passenger-trips were made, down 5.3 percent from the same period last year, of which passenger trips on domestic routes sank 7 percent to 44.01 million, the CAAC said. 

The sharp downturn in passenger demand as a re-sult of the COVID-19 epidemic will have a financial impact on airlines - severe for those particularly ex-posed to the China market, IATA said. 

IATA estimates global traffic will be reduced 4.7 per-cent by the virus, which could more than offset the growth IATA had previously forecast and cause the first overall decline in demand since the Global Fi-nancial Crisis of 2008-09. And that scenario would translate into lost passenger revenues of $29.3 bil-lion.

IATA said these estimates are based on a scenario where COVID-19 has a similar V-shaped impact on demand as the 2002-2003 SARS. That was charac-terized by a six-month period of sharp decline fol-lowed by an equally quick recovery. 


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