ISLAMABAD: The ongoing coronavirus outbreak has affected global travel and shows a potential reduction of $4-5 billion on gross operating revenues for airlines worldwide, according to the International Civil Aviation Organisation (ICAO) preliminary forecast.

In its report relating to the expected economic impacts from the travel bans on international air connectivity in the wake of coronavirus, the ICAO noted that these estimates do not include potential impacts due to reductions in international air freight movements on cargo-only aircraft, airports, air navigation service providers, to Chinese domestic air traffic, or to international traffic with respect to the Hong Kong and Macau Special Administrative Regions of China, or its Taiwan province.

The preliminary estimates indicate that the first quarter of 2020 has instead seen an overall reduction ranging from 39 per cent to 41pc of passengers capacity, or a reduction of 16.4-19.6 million passengers compared to what airlines had projected.

ICAO is a specialised agency of the United Nations, created in 1944 to promote the safe and orderly development of international civil aviation throughout the world. The agency currently reports that some 70 airlines have cancelled all international flights to and from mainland China, and that a further 50 airlines have curtailed related air operations.

This has resulted in an 80pc reduction of foreign airline capacity for travelers directly to and from China, and a 40pc capacity reduction by Chinese airlines.

Prior to the outbreak, airlines had planned to increase capacity by 9pc on international routes to and from China for the first quarter of 2020 compared to 2019, ICAO says in a press release.

With respect to major tourism-related impacts in the first quarter of 2020 due to reductions in Chinese air travelers, ICAO estimates that Japan could lose $1.29 billion in tourism revenue, followed by Thailand at $1.15 billion.

The agency also noted that the coronavirus (COVID-19) impacts are expected to be greater than those caused by the 2003 SARS epidemic, in light of the higher volume and greater global extent of the flight cancellations being seen.

Seasonal passenger load factors are another extenuating factor, as is the fact that China’s international air traffic has doubled, and its domestic traffic increased five-fold, since the 2003 period.

Published in Dawn, February 16th, 2020