Airlines in the Asia-Pacific region stand to lose $27.8 billion (£21.6 billion) of revenue this year as they slash flights due to declining demand as a result of the coronavirus, according to a preliminary estimate from an industry body.
The bulk of the losses will be borne by Chinese carriers, including a $12.8 billion hit to the Chinese domestic market alone, the International Air Transport Association (IATA) said in a forecast released in New York on Thursday.
Chinese airlines have cut 80% of their planned capacity to, from and within China this week, according to flight data firm OAG, as they grapple with a sharp fall in demand due to the virus that has killed more than 2,100 people in China.
Asian hub carriers Cathay Pacific Airways Ltd (0293.HK) and Singapore Airlines Ltd (SIAL.SI) have cut capacity across their global networks as they look to manage the crisis.
Overall, IATA expects passenger traffic in the Asia-Pacific region to fall by 8.2% this year, compared to an earlier estimate of a 4.8% rise.
"Airlines are making difficult decisions to cut capacity and in some cases routes," IATA Director General Alexandre de Juniac said in a statement. "Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines."
Carriers outside Asia are expected to lose $1.5 billion of revenue due to the virus, IATA said, adding it was too early to quantify the impact on earnings.
Air France KLM SA (AIRF.PA) warned on Thursday of a 150 million to 200 million euro ($162 million to $216 million) hit to earnings by April as it contends with the coronavirus epidemic's "brutal" impact on the airline industry.