Tag Archives: novel coronavirus

IATA: COVID-19 cuts demand and revenues – Asia carriers could lose $27.8 billion

The International Air Transport Association (IATA) announced that its initial assessment of the impact of the Novel Coronavirus 2019 outbreak (COVID-19) shows a potential 13% full-year loss of passenger demand for carriers in the Asia-Pacific region. Considering that growth for the region’s airlines was forecast to be 4.8%, the net impact will be an 8.2% full-year contraction compared to 2019 demand levels.

In this scenario, that would translate into a $27.8 billion revenue loss in 2020 for carriers in the Asia-Pacific region—the bulk of which would be borne by carriers registered in China, with $12.8 billion lost in the China domestic market alone.

In the same scenario, carriers outside Asia-Pacific are forecast to bear a revenue loss of $1.5 billion, assuming the loss of demand is limited to markets linked to China. This would bring total global lost revenue to $29.3 billion (5% lower passenger revenues compared to what IATA forecast in December) and represent a 4.7% hit to global demand. In December, IATA forecast global RPK growth of 4.1%, so this loss would more than eliminate expected growth this year, resulting in a 0.6% global contraction in passenger demand for 2020.

These estimates are based on a scenario where COVID-19 has a similar V-shaped impact on demand as was experienced during SARS. That was characterized by a six-month period with a sharp decline followed by an equally quick recovery. In 2003, SARS was responsible for the 5.1% fall in the RPKs carried by Asia-Pacific airlines.

The estimated impact of the COVID-19 outbreak also assumes that the center of the public health emergency remains in China. If it spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger.

It is premature to estimate what this revenue loss will mean for global profitability. We don’t yet know exactly how the outbreak will develop and whether it will follow the same profile as SARS or not. Governments will use fiscal and monetary policy to try to offset the adverse economic impacts. Some relief may be seen in lower fuel prices for some airlines, depending on how fuel costs have been hedged.

“These are challenging times for the global air transport industry. Stopping the spread of the virus is the top priority. Airlines are following the guidance of the World Health Organization (WHO) and other public health authorities to keep passengers safe, the world connected, and the virus contained. The sharp downturn in demand as a result of COVID-19 will have a financial impact on airlines—severe for those particularly exposed to the China market. We estimate that global traffic will be reduced by 4.7% by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the Global Financial Crisis of 2008-09. And that scenario would translate into lost passenger revenues of $29.3 billion. Airlines are making difficult decisions to cut capacity and in some cases routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines,” said Alexandre de Juniac, IATA’s Director General and CEO.

Role of Governments

Governments have an important role to play in this crisis:

  • Operations: Airlines have developed standards and best practices linked to the International Health Regulations (IHR) to manage effectively and efficiently in times of public health emergencies. Airlines, therefore, depend on governments to also follow the IHR so we have an effective global approach to containing the outbreak. “We have learned a lot from previous outbreaks. And that is reflected in the IHR. Governments need to follow it consistently,” said de Juniac.
  • Leadership: It is also important for governments to take leadership in shoring up their economies. The Singapore government, for example, is allocating SGD 112 million to provide financial relief to airlines and the aviation sector struggling to economically maintain connectivity. “Airlines and governments are in this together. We have a public health emergency, and we must try everything to keep it from becoming an economic crisis. Relief on airport costs will help maintain vital air connectivity. Other governments should take good note and act quickly,” said de Juniac.

Advice to Travelers

The WHO has not called for restrictions on travel or trade. Indeed, air transport plays a major role—bringing medical staff and supplies to where they are needed.

WHO has published extensive advice to travelers on its website. Passengers should be reassured that cabin air is filtered, that aircraft are cleaned in line with global standards, that key airports have implemented temperature screening for travelers and that airline staff and crew are trained to deal with the rare case of a passenger presenting with symptoms of infection.

“If you are sick, don’t travel. If you have flu-like symptoms, wear a mask and see a doctor. And when you travel wash your hands frequently and don’t touch your face. Observing these simple measures should keep flying safe for all,” said Dr. David Powell, IATA’s Medical Advisor.

State Department issues the highest advisory: ‘Do not travel to China’ due to coronavirus outbreak

The U.S. Department of State issued this statement concerning China:

Do not travel to China due to novel coronavirus first identified in Wuhan, China. On January 30, the World Health Organization has determined the rapidly spreading outbreak constitutes a Public Health Emergency of International Concern. Travelers should be prepared for travel restrictions to be put into effect with little or no advance notice.  Commercial carriers have reduced or suspended routes to and from China.

Those currently in China should consider departing using commercial means. The Department of State has requested that all non-essential U.S. government personnel defer travel to China in light of the novel coronavirus.

In an effort to contain the novel coronavirus, the Chinese authorities have suspended air, road, and rail travel in the area around Wuhan and placed restrictions on travel and other activities throughout the country. On January 23, 2020, the Department of State ordered the departure of all non-emergency U.S. personnel and their family members from Wuhan. The U.S. government has limited ability to provide emergency services to U.S. citizens in Hubei province.

The CDC recommends travelers avoid all nonessential travel to Wuhan, China due to outbreak of respiratory illness caused by novel coronavirus.

The Center for Disease Control and Prevention (CDC) issued this statement:

Novel Coronavirus in China

Warning – Level 3, Avoid Nonessential Travel
Alert – Level 2, Practice Enhanced Precautions
Watch – Level 1, Practice Usual Precautions

Key Points

  • CDC recommends that travelers avoid all nonessential travel to China.
  • There is an ongoing outbreak of respiratory illness caused by a novel (new) coronavirus that can be spread from person to person.
    • Chinese officials have closed transport within and out of Wuhan and other cities in Hubei province, including buses, subways, trains, and the international airport. Other locations may be affected.
    • Older adults and people with underlying health conditions may be at increased risk for severe disease.
    • The situation is evolving. This notice will be updated as more information becomes available.

    What is the current situation?

    • CDC recommends that travelers avoid all nonessential travel to China. In response to anoutbreak of respiratory illness, Chinese officials have closed transport within and out of Wuhan and other cities in Hubei province, including buses, subways, trains, and the international airport.  Additional restrictions and cancellations of events may occur.
    • There is limited access to adequate medical care in affected areas. 
    • A novel (new) coronavirus is causing an outbreak of respiratory illness that began in the city of Wuhan, Hubei Province, China. This outbreak began in early December 2019 and continues to grow. Initially, some patients were linked to the Wuhan South China Seafood City (also called the South China Seafood Wholesale Market and the Hua Nan Seafood Market).

      Chinese health officials have reported thousands of cases in China and severe illness has been reported, including deaths. Cases have also been identified in travelers to other countries, including the United States. Person-to-person spread is occurring in China. The extent of person-to-person spread outside of China is unclear at this time.

      Coronaviruses are a large family of viruses. There are several known coronaviruses that infect people and usually only cause mild respiratory disease, such as the common cold. However, at least two previously identified coronaviruses have caused severe disease — severe acute respiratory syndrome (SARS) coronavirus and Middle East respiratory syndrome (MERS) coronavirus.

      Signs and symptoms of this illness include fever, cough, and difficulty breathing. This novel coronavirus has the potential to cause severe disease and death. Available information suggests that older adults and people with underlying health conditions or compromised immune systems may be at increased risk of severe disease.

      In response to this outbreak, Chinese officials are screening travelers leaving some cities in China. Several countries and territories throughout the world are reported to have implemented health screening of travelers arriving from China.

      On arrival to the United States, travelers from China may be asked questions to determine if they need to undergo health screening. Travelers with signs and symptoms of illness (fever, cough, or difficulty breathing) will have an additional health assessment.

      What can travelers do to protect themselves and others?

      CDC recommends avoiding nonessential travel to China. If you must travel:

      • Avoid contact with sick people.
      • Discuss travel to China with your healthcare provider. Older adults and travelers with underlying health issues may be at risk for more severe disease.
      • Avoid animals (alive or dead), animal markets, and products that come from animals (such as uncooked meat).
      • Wash hands often with soap and water for at least 20 seconds. Use an alcohol-based hand sanitizer if soap and water are not available.

      If you were in China in the last 14 days and feel sick with fever, cough, or difficulty breathing, you should:

      • Seek medical care right away. Before you go to a doctor’s office or emergency room, call ahead and tell them about your recent travel and your symptoms.
      • Avoid contact with others.
      • Not travel while sick.
      • Cover your mouth and nose with a tissue or your sleeve (not your hands) when coughing or sneezing.
      • Wash hands often with soap and water for at least 20 seconds. Use an alcohol-based hand sanitizer if soap and water are not available.

      Clinician Information

      Healthcare providers should obtain a detailed travel history for patients with fever and respiratory symptoms. For patients with these symptoms who were in China on or after December 1, 2019, and had onset of illness within 2 weeks of leaving, consider the novel coronavirus and notify infection control personnel and your local health department immediately.

      Although routes of transmission have yet to be definitively determined, CDC recommends a cautious approach to interacting with patients under investigation. Ask such patients to wear a surgical mask as soon as they are identified. Conduct their evaluation in a private room with the door closed, ideally an airborne infection isolation room, if available. Personnel entering the room should use standard precautions, contact precautions, and airborne precautions, and use eye protection (goggles or a face shield). For additional infection control guidance, visit CDC’s Infection Control webpage.

     

Situation in U.S.

Imported cases of 2019-nCoV infection in people have been detected in the U.S. While person-to-person spread among close contacts has been detected with this virus, at this time this virus is NOT currently spreading in the community in the United States.

2019-nCoV in the U.S.