The coronavirus epidemic could rob passenger airlines of up to $113bn (€100bn) in revenues this year, an industry body warned, more than three times a projection it made just two weeks ago as the virus continues to spread around the world.
The warning from the International Air Transport Association (IATA) came as British regional carrier Flybe became the first big casualty of the slump in travel demand due to the crisis.
Norwegian Air also scrapped its profit forecast for 2020, while US budget carrier Southwest predicted a $200m to $300m hit to its first-quarter operating revenues.
“There are lots of airlines that have got relatively narrow profit margins and lots of debt, and a cash flow shock like this could certainly send some into a very difficult situation,” IATA chief economist Brian Pearce said.
In a sign of the difficulties this is creating for airlines, a Turkish Airlines jet was flown back to Istanbul without any passengers on board on orders from Singapore after a passenger who had arrived on the same plane tested positive for the virus.
The latest IATA estimates equate to a drop of between 11% and 19% compared with its 2020 industry revenue forecast in December.
IATA said its lower forecast was based on the virus being contained in current markets with over 100 cases as of March 2, while the higher estimate was based on a broader epidemic.
Both scenarios assume there will be a recovery by late summer.
The failure of British regional airline Flybe comes less than two months after a rescue deal for the company was agreed by its owners and the UK government.
Its collapse came a day after Ryanair CEO Michael O’Leary told Reuters it was “inevitable” the coronavirus crisis would lead to airline bankruptcies.
Norwegian Air said it would cancel 22 long-haul flights between Europe and the US from March 28 to May 5.
Analysts say few airlines are likely to remain unscathed, as both business and tourist travel is being affected.
“The drop-off in bookings to Italy is even worse than we have observed in the past for some of the most disruptive events such as terror attacks,” data firm ForwardKeys said.