Preliminary forecasts issued by ICAO (International Civil Aviation Organization) have identified an 80 per cent reduction in foreign airline capacity for travellers directly to and from China as a result of the coronavirus COVID-19 travel bans.
ICAO currently reports that some 70 airlines have cancelled all international flights to/from mainland China, and that a further 50 airlines have curtailed related air operations. This has resulted in an 80 per cent reduction of foreign airline capacity for travellers directly to/from China, and a 40 per cent capacity reduction by Chinese airlines. Prior to the outbreak, airlines had planned to increase capacity by 9 per cent on international routes to/from China for the first quarter of 2020, compared to 2019.
ICAO’s preliminary estimates indicate that the first quarter of 2020 has instead seen an overall reduction ranging from 39 per cent to 41 per cent of passenger capacity, or a reduction of 16.4 to 19.6 million passengers compared to airline projections. This equates to a potential reduction of US$4 to 5 billion in gross operating revenues for airlines worldwide.
The estimates do not include potential impacts due to reductions in international air freight movements on cargo-only aircraft, airports, air navigation service providers to Chinese domestic air traffic, or to international traffic with respect to the Hong Kong and Macau Special Administrative Regions of China, or its Taiwan Province.
Virus set to hit revenues in Asian tourism hotspots
The economic impact of the coronavirus is also set to impact on tourism within the first quarter of 2020 due to the reduction of numbers of iChinese air travellers, ICAO estimates that Japan could lose US$ 1.29 billion in tourism revenue, followed by Thailand at US$ 1.15 billion.
The agency predicts that the impact of COVID-19 is expected to be greater than the 2003 SARS epidemic, in light of the higher volume and greater global extent of the flight cancellations being seen. Seasonal passenger load factors are another extenuating factor, along with the doubling of China’s international air traffic. Domestic traffic has also increased five-fold, since 2003.
ICAO stressed that these are preliminary figures and forecasts, and that they do not yet take into account the more comprehensive assessments of direct and indirect COVID-19 economic impacts which will eventually be determined.