US$2 trillion loss estimated for aviation-related industries worldwide from coronavirus pandemic, think tank says
- The pandemic’s impact on the wider global aviation industry will be more than 10 times that of airline losses of US$200 billion, founder and president of Institute for Aviation Research says
- Airports in Asia-Pacific will see a loss of US$23.9 billion this year as 1.5 billion fewer passengers travel through region’s hubs, Airports Council International says
The losses for the wider global aviation industry, excluding airlines, from the coronavirus pandemic could exceed US$2 trillion this year, with millions of jobs at risk in Asia-Pacific alone, according to Zheng Lei, founder and president of the Institute for Aviation Research, an independent think tank.
“Airlines are the key to the whole supply chain, if they become problematic, other parts of the supply chain will be affected,” said Lei, who is also the head of aviation department at Swinburne University of Technology in Australia.
“As to impact on the global aviation sector, it has already surpassed US$200 billion. This is only for airlines, not including [the] impact on airports, retailers inside airports and on-the-ground workers. Its bigger impact should be more than tenfold of that on other sectors in the economy, such as to tourism, and shocks to export and import trade.”
According to recent estimates by the International Air Transport Association (IATA), passenger revenue losses for airlines in the Asia-Pacific this year are expected to reach around US$88 billion and US$252 billion globally.
The aviation ecosystem is vast and supports many industries. It includes in-flight meal providers, ground service companies, transport, storage and maintenance providers, employing millions in duty-free shops, retail and catering, ground staff, shuttle bus drivers and security personnel in airports across the world.
The aviation sector and industries associated with it have been hit hard by the Covid-19 pandemic, which was first identified in China. The world’s second-largest economy and its outbound travellers have been a major driver of the global tourism industry. They spent US$130 billion in 2018, up 13 per cent from a year earlier, according to the China Tourism Academy. But as the disease spread rapidly to more than 200 countries worldwide, governments imposed sweeping travel restrictions, forcing airlines to ground most of their fleet.
