Passenger airlines industry could lose up to $113 billion revenues in 2020 because of Coronavirus: IATA

On Monday, in a statement the Airports Council International (ACI) Asia-Pacific stated, airport passenger traffic in the Asia-Pacific region is likely to shrink by 24% due to China’s coronavirus, thus causing a loss of $3 billion in airport revenues.

Cancellation of flights have led to lower airline landing and parking charges, along with a decline in security, and passenger charges. It has also resulted in a drop in retail spending which has had a cascading impact on airport operators.

“Unlike airlines, who can choose to cancel flights or relocate their aircraft to other markets to reduce operating costs, airport operators manage immovable assets that cannot be closed down,” said Stefano Baronci, Director General of ACI Asia-Pacific.

“They are faced with immediate cash flow pressures with limited ability to reduce fixed costs and few resources to fund capacity expansion efforts for longer-term future growth,” said Baronci.

Last week, the International Air Transport Association (IATA), which represents airlines, had called for rules governing airport slots to be suspended immediately in light of the disruption to flight schedules caused by the coronavirus epidemic that first broke out in China in December 2019.

Takeoff and landing slot rules requires airlines to fill at least 80% of their slots in any given season, or risk losing their allocation next time round.

In a statement, ACI Asia-Pacific stated, although it was sympathetic with the airlines’ needs to avoid flying empty planes so that they can retain their airport slots, but it also wanted an evidence-based market-by-market review rather than blanket permission to cut flights without the risk of losing slots.

It went on to add, the “IATA proposal would give airlines the freedom to cancel flights to and from congested airports not necessarily linked to the coronavirus outbreak, jeopardizing the ability for countries to stay connected with the world, which in turn would have knock-on effects on their economies”.

Last week, the IATA had said China’s coronavirus epidemic could cost the passenger airlines industry up to $113 billion in revenues in 2020.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: