Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

A first assessment of the traffic effects of the Novel Coronavirus 2019 outbreak (COVID-19) from the International Air Transport Association (IATA) shows the potential for a 13-percent full-year loss of passenger demand for carriers in the Asia-Pacific region. Considering an original growth forecast for the region of 4.8 percent, Asia-Pacific airlines will experience an 8.2 percent full-year contraction compared with 2019 demand levels. That would translate into a $27.8 billion revenue loss in 2020 for airlines in the Asia-Pacific region, the bulk of which carriers registered in China would bear, as the Chinese domestic market alone sees $12.8 billion in losses.

 


Under the same scenario, carriers outside Asia-Pacific would bear a revenue loss of $1.5 billion, assuming the loss of demand remains in markets linked to China. That would bring total global lost revenue to $29.3 billion (5 percent lower passenger revenues compared to what IATA forecast in December) and represent a 4.7 percent hit to global demand. In December, IATA forecast global RPK growth of 4.1 percent, meaning such as a loss would more than eliminate expected growth this year, resulting in a 0.6 percent global contraction in passenger demand for 2020.&nbsp;

 


IATA based the estimates on a scenario where COVID-19 shows a similar V-shaped effect on demand that happened during SARS, when the industry saw a six-month period with a sharp decline followed by an equally quick recovery. In 2003, SARS resulted in a 5.1 percent fall in the RPKs carried by Asia-Pacific airlines.&nbsp;

 


The estimated effect 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, the effects on airlines from other regions would prove larger.

 


IATA added that it remains premature to estimate what the revenue loss will mean for global profitability because no one knows exactly how the outbreak will develop and whether or not it will follow the same profile as SARS. Governments will use fiscal and monetary policy to try to offset the adverse economic effects, while some airlines might see relief in lower fuel prices depending on how they have hedged fuel costs.

 


“These are challenging times for the global air transport industry,” said IATA director general Alexandre de Juniac. “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 percent 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.”

 


IATA noted that governments play a vital role in alleviating the crisis. Because airlines have developed standards and best practices linked to the International Health Regulations (IHR) to manage public health emergencies, they depend on governments to also follow the IHR to ensure an effective global approach to containing the outbreak. “We have learned a lot from previous outbreaks,” said de Juniac. “And that is reflected in the IHR. Governments need to follow it consistently.”

 


Finally, IATA stressed the importance of governments taking&nbsp;leadership in shoring up their economies. It cited the Singapore government’s allocation of S$112 million to provide financial relief to airlines struggling to economically maintain connectivity as an example. “Airlines and governments are in this together,” said de Juniac. “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.”

News about commercial airlines, including regulations, aircraft orders, safety, acquisitions, and mergers.

IATA Sees a Near $30B Loss from Coronavirus

Airlines in Asia-Pacific will experience a 13-percent loss of passenger demand for 2020, estimates IATA

2024 Corporate Aviation Leadership Summit

Charles Alcock

News and developments about airplanes, helicopters and unmanned air vehicles used in all varieties of operations, including airlines, military, business, commercial, general aviation and private.

News about environmental issues relating to aircraft operations, including noise issues, emissisions, and regulations. See Fuel for biofuel.

News and issues relating to international air transport and cargo carriers, national airlines and regional airlines, including aircraft, engines, personnel, acquisitions, accidents, safety, security and training.

Agreement between start-ups could lead to orders for up to 15 aircraft

Skyhop Plans Island Routes With Noemi's Electric Seaplane

Howard Hardee

Airline plans to gradually replace its Embraer E-Jet fleet

A220’s Performance Drives BermudAir’s Fleet Growth

Partners say eVTOLs could accelerate response times in crowded Indian cities

Air India Backs SkyDrive Emergency Medical eVTOL Plans

News and issues relating to the aerospace industry that are related to the science, engineering and business of flight in space involving civil, industrial and military applications, and similar topics related to flight in the atmosphere of the Earth that are not covered more directly by other AINonline subject channels. In other words, both astronautical and aeronautical subjects, except for those aeronautical topics that are specifically covered elsewhere on this website.

Rival Boeing arguably claimed bragging rights at the Farnborough International show

Airbus Balances Shareholder Returns and New Aircraft

New developments at airports including regulations and noise issues; legal disputes; openings, acquisitions and mergers.

Connections to London Heathrow and Manchester airports will start first

Virgin Firms Up eVTOL Air Taxi Alliance with Joby

News and developments about everything that goes into the cabin of an aircraft, from floor coverings to headliners, with a special emphasis on in-flight entertainment, communications and other electronics for passengers. If it is in the cabin of an aircraft, it’s covered here.

More In Airlines

Skyhop Plans Island Routes With Noemi's Electric Seaplane

Agreement between start-ups could lead to orders for up to 15 aircraft

A220’s Performance Drives BermudAir’s Fleet Growth

Airline plans to gradually replace its Embraer E-Jet fleet

Air India Backs SkyDrive Emergency Medical eVTOL Plans

Partners say eVTOLs could accelerate response times in crowded Indian cities

Airbus Balances Shareholder Returns and New Aircraft

Rival Boeing arguably claimed bragging rights at the Farnborough International show

Virgin Firms Up eVTOL Air Taxi Alliance with Joby

Connections to London Heathrow and Manchester airports will start first

ATR Chases New Regional Markets for Twin Turboprops

Iran war and wider geopolitical pressure stall buying decisions

Embraer Racks Up E-Jet Orders at Farnborough

30 firm orders led by Abra

Gulf Air May Buy JetZero’s Blended-wing-body Z4

Japan Airlines also expresses interest at Farnborough Airshow

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN