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Coronavirus effect on air transport is ‘likely to be temporary,’ says IATA

The International Air Transport Association (IATA) has said history indicates that the coronavirus is unlikely to have a long-term effect on air travel demand. In an article posted on the website of its official magazine, Airlines., it notes analysis of previous epidemics such as SARS which shows the industry to be resilient to shocks.

Right now that may not seem the case. Latest media reports highlight that the death toll has risen beyond 130 people with confirmed cases now exceeding 6,500, across at least 19 countries globally, including the first human-to-human transition outside of China.

Air and ground transportation has been blocked in Wuhan, the origin of the virus, airlines have scaled-back capacity into other parts of China, rescheduling other flights to minimise the exposure to its own staff. British Airways has suspended its flights from London to Beijing and Shanghai until March 2020 following updated travel advice from the UK’s Foreign and Commonwealth Office. The Lufthansa Group has followed its European rival and its own airline along with the SWISS and Austrian Airlines operating arms have ended China flights, initially until 09-Feb-2020.

Meanwhile, Finnair has suspended three times weekly Helsinki-Beijing Daxing between 05-Feb-2020 and 29-Mar-2020, and twice weekly Helsinki-Nanjing between 08-Feb-2020 and 29-Mar-2020, but will continue to operate to Beijing Capital, Shanghai and Guangzhou in mainland China. Finnair’s COO Jaakko Schildt stated the cancellations were needed to “manage the impacts of the recent suspension of group travel by Chinese authorities, which have a pronounced impact on the load factors” of those particular routes. The US Government has suggested it could update guidance that could temporarily also end non-stop flights in and out of China from and to the US. For now, American Airlines has said it will suspend services between Los Angeles and Beijing and Shanghai from 09-Feb-2020 through 27-Mar-2020, but will retain other Chinese connections. Fellow major, United Airlines, has cut around a third of its flights for the first week of Feb-2020, citing a “significant decline in demand”.

While the World Health Organization (WHO) has declined to define the virus at this stage as an epidemic, nor pandemic, it advises that measures to limit the risk of exportation or importation of the disease should be implemented, without unnecessary restrictions of international traffic.

The constant media coverage, including increasing cases across the world, has created a lot of attention that will naturally impact travel plans in and out of China, and the wider region. Hong Kong, a major regional gateway is particularly exposed, especially given its recent geopolitical situation.

Despite concerns over the impact on air travel, IATA analysis suggests that airlines will weather the storm in the long term. “In the past, the airline industry has proven resilient to shocks, including pandemics,” it says. “Even in the outbreak of SARS, monthly international passenger traffic returned to its pre-crisis level within nine months.”

Strong growth in the Chinese air transport market in recent years has seen an influx of 450 million additional passengers compared to a decade ago. This is clearly evident in the virus’ host city of Wuhan where the number of international markets linked by non-stop services increased six-fold during the past decade.

OPINION: The Blue Swan Daily “China has changed a lot since the SARS outbreak and just as the coronavirus appears to be spreading more quickly than SARS, a exponentially larger air transport system makes us believe that the industry will take a much more notable hit than it did then.”

© The Blue Swan Daily

Image: Kevan James

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