New concerns are being raised about the impact of the coronavirus on the airline industry.
Global air traffic demand fell 14% in February, the most since the 9/11 terrorist attacks, according to the International Air Transport Association (IATA). The decline reflects a record collapse in travel in China that month and a 41% fall in demand in the Asia-Pacific region, IATA said, warning that the situation has only grown worse.
"This is the biggest crisis that the industry has ever faced," IATA’s Director General Alexandre de Juniac said in a written statement. "The impact on aviation has left airlines with little to do except cut costs and take emergency measures in an attempt to survive in these extraordinary circumstances."
IATA, which represents 290 airlines worldwide, said last month that carriers could lose $252 billion U.S. in revenue this year and burn through as much as $61 billion U.S. in the second quarter as travel slumps. Confirmed coronavirus cases globally have now crossed one million with 53,000 deaths.
The full impact of the pandemic won’t be revealed until the March results, as many countries only started restricting travel last month. Airlines in the U.S., for example, had a strong February as domestic traffic jumped 10%, though demand has since fallen sharply, IATA said.
IATA has been lobbying for government bailouts as many carriers are fast running out of cash because sales are suspended but their fixed costs remain. Beyond airlines, Boeing Co. (NYSE:BA) expects thousands of workers to retire or accept a buyout offer as the Chicago-based plane maker shrinks its operations, while Airbus SE is extending credit lines and has canceled its stock dividend.
“This is aviation’s darkest hour and it is difficult to see a sunrise ahead,” said IATA’s de Juniac.
