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Letter To the Editor

Coronavirus outbreak hits aviation industry

Published : Thursday, 27 February, 2020 at 12:00 AM  Count : 132

Dear Sir
The International Air Transport Association (IATA) recently unveiled that airlines stand to lose a combined $29.3 billion of revenue this year in the ongoing coronavirus crisis. The estimate is based on projections of a 13-percent full-year decline in passenger demand, mostly in China bound.

In total, airlines in the Asia Pacific region are set to see a $27.8 billion revenue loss in 2020, while those outside Asia are expected to lose $1.5 billion in revenue and airlines in China's domestic market alone are estimated to lose around $12.8 billion.
IATA said its estimate assumed that COVID-19 behaved like the SARS outbreak nearly two decades ago, which was characterised by a six-month period with a sharp decline followed by an equally quick recovery. However, if the virus spreads more widely to Asia-Pacific markets then the impact on airlines from other regions would be more larger.

Though governments will use fiscal and monetary policy how to offset the adverse economic impacts but some relief may be assumed in lower fuel prices for some airlines, depending on how fuel costs have been hedged.

It was therefore difficult to predict by how much exactly lost revenue would weigh on profits. But airlines are already taking "difficult decisions" to cut capacity, or even routes. This will be a very tough year for airlines as tourists visit in and around China has reduced drastically. So stopping the spread of the virus is the top priority for every business.

Md Zillur Rahaman
Gandaria, Dhaka

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