The International Air Transport Association (IATA) has forecast global revenue losses for the passenger airline industry of between $63 billion and $113 billion.

Figures at the upper end of the scale would put the financial impact of the virus on passenger revenues as similar to the impact of the 2008 financial crash. IATA’s analysis relates only to passenger revenues and are based on different scenarios based on the global spread of coronavirus.

Crisis will bring double digit passenger revenue drop

If the outbreak is contained (in a scenario where COVID-19 is contained in current markets with over 100 cases as of March 2) the fall in demand will translate to an 11 per cent worldwide passenger revenue loss, equal to $63 billion. China would account for some $22 billion of this total.

In a scenario where the disease has a more extensive spread (markets that currently have 10 or more confirmed COVID-19 cases as of 2 March), the outcome is a 19 per cent loss in worldwide passenger revenues, which equates to $113 billion.

Airline share prices have fallen nearly 25 per cent since the outbreak began – 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003. IATA added that this equated to “a shock to industry revenues much greater than our previous analysis.”

A380s grounded, staff offered unpaid leave

IATA’s analysis comes as UK airlines cancel more flights to affected areas. Cost cutting measures taken by airlines such as Korean Air, Qantas and Lufthansa include grounding some, or all, of their A380 fleet. Norwegian Airlines is considering temporary staff layoffs after cancelling 3,000 flights and British Airways is encouraging crew to take unpaid leave.

The Italian government has put the country in lockdown to help counteract the spread of the virus. The Foreign and Commonwealth Office (FCO) has advised against all but essential travel to Italy, due to the ongoing outbreak of COVID-19 and states that its guidance is “in line with various controls and restrictions imposed by the Italian authorities on March 9.” Italy has seen coronavirus cases soar past 10,000 since the arrival COVID-19.

Flights to Italy suspended

easyJet has now cancelled all flights to Italy until April, making the move the day after BA and Ryanair cut flights to the European country until the first week of April.

British Airways will suspend flights until April 4 with 18 routes affected. Ryanair has suspended all Italian domestic flights and all Italian international flights from midnight on March 13. British nationals are able to depart Italy without restriction.