On February 20, International Air Transport Association (IATA) published an initial assessment over the impact of COVID-19 on the aviation industry, which estimates a 13% loss of RPKs in 2020 for Asia-Pacific airlines given COVID-19 impact has a SARS-shaped profile, meaning a 4.7% loss to industry-wide RPKs in 2020, a $29bn loss of passenger revenues in total, and $27.8bn loss of passenger revenues in Asia Pacific.

The assessment believes outbreak impact usually peaks after 1-3 months and recovery to pre-outbreak levels will come in 6-7 months based on previous outbreaks of SARS, Avian Flu and MERS Flu.

The assessment also points out the fact that since 2002, China and other Asia Pacific airlines’ share in worldwide RPKs has risen from 27% to 35%, and share of China’s domestic market in the Asia-Pacific RPKs, from 12% to 28%. Therefore SARS experience may underestimate today’s impact, as China’s economic size is now much greater.

The assessment stressed that currently Asia-Pacific airlines are most exposed to Chinese markets, but others could also suffer a spill over if COVID-19 effects continue to spread; yet lower fuel prices may provide some offset.