Airlines stand to lose as much as US$113 billion (S$157 billion) in revenue this year after a dramatic increase in coronavirus cases worldwide over the past week, the group that represents global carriers said yesterday.
This would put the impact of the Covid-19 infections on air travel at the same level as the fallout of the global economic crisis in 2009, International Air Transport Association (Iata) chief economist Brian Pearce told reporters.
A fortnight ago, Iata forecast that the global aviation sector stood to lose some US$29 billion in revenue as a result of the coronavirus.
But the virus' fast spread beyond the Asia-Pacific in recent days prompted Iata to update its assessment to a loss of between US$63 billion and US$113 billion.
Speaking at the close of a two-day industry workshop at the Mandarin Orchard hotel, Mr Pearce said the impact of Covid-19 was already "considerably worse" for carriers than the severe acute respiratory syndrome (Sars) outbreak in 2003.
One reason is that the Chinese travel market is about four times the size it was back in 2003, so Asia-Pacific airlines can expect to see a much bigger hit to their bottom lines.
"If the virus had been limited to Chinese markets, (then) the impact of airlines in other regions, we thought, would be relatively minor," he said.
"But clearly, what we have seen in the last week is a dramatic increase in outbreaks in regions outside of the Asia-Pacific, particularly in Europe, which means that this is now a global situation."
The coronavirus has also adversely affected passenger confidence, with even bookings to countries with very few cases having slumped, noted Mr Pearce.
If countries that today have only a handful of cases see a surge in infections, revenue loss could hit the worst-case scenario, mirroring industry losses last experienced in the aftermath of the global financial crisis.
Airline industry revenue was US$483 billion in 2009, compared to US$564 billion in 2008. The figure bounced back to US$545 billion in 2010.
Any recovery could also be delayed. While in the past, disease outbreaks such as Sars and the avian flu saw cases peak within three months and passenger numbers recover within six months, the delayed effect of Covid-19 outbreaks means this fast, "V-shaped" recovery could be dragged out, he added.
While acknowledging that people have become afraid to fly, Iata officials yesterday stressed that air travel remained very safe despite the virus situation.
They noted that commercial aircraft are equipped with Hepa (high efficiency particulate air) filters that remove at least 99.97 per cent of airborne particles, the same level of filtration that can be found in hospitals.
Iata medical adviser David Powell said: "To date, there is no real evidence of transmission from one passenger to another passenger despite the fact that we know there have been instances where people have flown and travelled even when already sick with a fever."
Agreeing, University of Toronto infectious diseases expert Isaac Bogoch said that the odds of catching the virus on a plane were "extremely small", and the risk could be mitigated further by practising good hand hygiene, such as frequent washing with soap and good coughing etiquette.
Among the 140 attendees at the workshop, which saw participants discuss best practices to combat the virus and ways to handle its impact, was Senior Minister of State for Health Lam Pin Min.
Dr Lam said that should a global pandemic come to pass, every country imposing travel restrictions on everyone else would be "a non-option that would hurt us all".
Governments, airlines, the health and civil aviation authorities need to start laying the groundwork so that necessary measures to mitigate the virus' spread can be put in place while allowing life to go on, he wrote on Facebook.
"I am glad that at a time when many international meetings are cancelled, Iata decided to hold this workshop in Singapore," he said. "It is a mark of confidence in what Singapore has done to help contain the outbreak and carry on with life."