A member of the Thai Airways crew disinfects the cabin of an aircraft of the national carrier during a procedure to prevent the spread of the coronavirus at Bangkok's Suvarnabhumi International Airport, Thailand, January 28, 2020.
- The coronavirus could cause the global airline industry to shrink for the first time since the global financial crisis of 2008 and 2009, an industry trade group warned on Thursday.
- Plummeting demand for travel within China, and to China and Hong Kong from the rest of the world, has led airlines to cancel thousands of flights.
- The worst impact is expected in the Asia-Pacific region, but the group said the entire industry is poised to contract from 2019 levels.
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Flight cancellations caused by the coronavirus outbreak will likely lead the global air transport industry to shrink for the first time since the global financial crisis of 2008 and 2009, a trade group warned.
The International Air Transport Association, otherwise known as the IATA, said on Thursday that it expected to see global air-traffic demand fall about 4.7% from levels it previously predicted for 2020. That would represent a 0.6% global contraction in passenger demand for the year.
The bulk of that impact is expected within the Asia-Pacific region, where IATA said it forecasts a staggering 8.2% year-over-year reduction in demand. That translates to a $27.8 billion revenue loss - $12.8 billion within the China domestic market alone.
"This will be a very tough year for airlines," Alexandre de Juniac, CEO and director of IATA, said in a statement. "Airlines are making difficult decisions to cut capacity and in some cases routes."
IATA previously projected industry-wide growth of 4.1%.
The projections come as global airlines have canceled thousands of flights to mainland China, Hong Kong, and the region due to plummeting demand caused by coronavirus fears, which made operating the flights commercially unviable.
US airlines have canceled most flights until late April, while China's airlines have reduced their schedules to bare-bones service. Hong Kong-based Cathay Pacific has said it plans to cut its global capacity by 40%, and its capacity to mainland China by 90%.
The expected fallout goes beyond airlines - the US travel industry predicts a loss of more than $10 billion due to the virus.