Just lately, Cebu Pacific has forecasted that it will take a hit of up to $79-million from its profits brought by the Novel Coronavirus (nCoV) outbreak now crippling China and the rest of the world.
Cebu Pacific is not the only airline. Cathay Pacific is asking 27,000 of its employees to take unpaid leaves. Hong Kong airlines is cutting jobs in order to save the carrier.
The total number of deaths caused by the nCoV has now breached 900, higher than the number of those who died from the SARS virus is 2003.
Travel restrictions have been imposed in and to China to stop the spread of the virus. The domestic and international aviation industry will be bearing the brunt of this as air travel is a key mode of domestic and international travel.
While all airlines will be affected as China's travel industry have grown significantly since 2003, Asian airlines will be the most affected.
In 2003 during the SARS outbreak, there was a 45% reduction of traffic in Asia. If the same would happen today, that would mean a 10% to 15% reduction in global traffic.
Countries have been imposing travel restrictions to and from China. More than that, many are afraid to travel, especially to other countries with a high count of people affected by the nCoV. Due to the low demand, many airlines have been cutting flights resulting to under utilized aircraft, crew, and personnel.
The Singapore Air Show this 2020 has also shown a significant drop in attendance. 70 exhibitors at the SAS2020 have dropped out. Lockheed Martin and Raytheon have confirmed that they are not attending this year.
Airlines have been proactive in minimizing losses too. Some airlines are sending more crew to minimize overnight stays and to shorten layover period. Some have been reducing frequency and capacity by more than 50% on their China flights.
Depending how long the strain will last, it will definitely make a significant impact on the Asian aviation industry. In 2003 during the SARS outbreak, Asia Pacific airlines lost $6-billion.
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This article first appeared on Air Traveller PH.
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