With the prediction of the International Air Transport Association (IATA), that the global aviation industry stand to lose revenue of $29.3bn over the coronavirus outbreak, Middle East carriers are already counting their loses.
According to newindianexpress.com, major travel disruptions have been recorded due to the virus and has already caused the equivalent of a roughly $100 million loss to airlines in the Middle East, which serves as a connection hub for east-west travel, the industry’s main trade association said Monday.
The Persian Gulf city of Dubai, which is home to the world’s busiest airport for international travel, relies heavily on tourism and aviation.
The Gulf is a major transit hub for passengers connecting from Europe to Asia.
The United Arab Emirates has cancelled all flights to Iran, as have other Gulf countries.
It has also limited flights in China to just Beijing to reduce the spread of the virus.
The International Air Transport Association, which represents around 290 airlines, said a projected 4.6% growth in passenger demand in the Middle East this year will be halved to just 2.3% if conditions do not change.
Most cases of the new coronavirus in the Middle East have come from travellers recently in Iran, where the virus has killed 66 people among some 1,500 who are infected.
Worldwide, the virus, which started in China, has infected more than 89,000 people, and more than 6,000 have died.
Even before the virus emerged, the big Gulf carriers had already posted significantly lower earnings due to higher fuel costs, a strengthened U.S. dollar, and lower airfreight and travel demand.
The IATA’s estimates do not include the additional impact to regional carriers forced to stop flights to Mecca and Medina, where Saudi Arabia suspended issuing visas to Muslim pilgrims to stymie the spread of the virus.
The United Arab Emirates-based newspaper The National reported that Dubai’s Emirates Group has given employees at the airline, the Middle East’s biggest, the option to take paid and even unpaid leave.
The company did not immediately respond to a request for comment.
Other airlines in Europe and Asia have reportedly done the same.
“It’s a demonstration of how hard the industry’s been hit by flight cancellations and closing borders,” said Muhammad Albakri, IATA’s regional vice president for Africa and the Middle East.
The association has said that if the spread of the virus continues, the aviation industry globally can expect a $30 billion revenue loss and a 4.7 percent reduction in global air traffic for the year.
The aviation industry in the Asia Pacific region will be hardest hit, seeing a $27.8 billion revenue loss if the situation does not improve. About $12.8 billion of that will be wiped from the domestic Chinese aviation market.
According to atqnews.com, the international body predicts that demand for air travel will fall for the first time in more than a decade.
Airlines in China and other parts of the Asia Pacific region are expected to take the vast majority of the impact.
It comes as carriers around the world have been forced to reduce flights.
In total, airlines in the Asia Pacific region are set to see a $27.8bn revenue loss in 2020, while those outside Asia are expected to lose $1.5bn in revenue, IATA has forecast.
Of that figure, IATA predicts that carriers in China are set to lose revenue of $12.8bn in their home market alone.
“Airlines are making difficult decisions to cut capacity and in some cases routes,” said IATA’s director-general Alexandre de Juniac. “This will be a very tough year for airlines.”
