The Coronavirus could cost global airlines billions in sales if it continues to spread. Losses are likely to far exceed what was experienced with the SARS outbreak.
It’s a nightmare for any business to face, losing customers and a loss in profits but airlines have faced major problems before:
- In the seventies, a spate of aircraft hijackings saw airlines improve security.
- In the eighties, bombs in the hold baggage become the new terrorism threat. A Boeing 747 was destroyed by a bomb killing 270 people in what became known as the Lockerbie bombing. This prompted another huge change to security processes.
- In the nineties, rocketing fuel prices saw profits tumble and then the Gulf war lead to huge financial losses of $4.8bn. Analysts say the industry took about a year to get back to previous traffic volumes.
- Into the new Millennium and the economic downturn was putting huge pressure on the industry profits in the face of declining passenger traffic, and then 9/11 happened and shock the industry worldwide and caused some airlines already in trouble to close.
- Just two years later and the SARS outbreak cost Asia Pacific carriers $6 billion in revenue. It took nine months before international passenger traffic returned to normal.
What effect will Coronavirus have on the airline industry? It’s caused the collapse of the already struggling Flybe and the predictions look bleak but as already proved this is a resilient industry that just keeps bouncing back.