ASSESSMENTS

As Coronavirus Takes Flight, the Airline Industry Takes Cover

Mar 13, 2020 | 10:00 GMT

This photo shows a rows of seats on a passenger aircraft.

A row of empty seats on a passenger aircraft. Travel restrictions and plummeting demand due to the coronavirus outbreak are ravaging the global airline industry, especially in key Asian and European markets.

(Peter Titmus/Education Images/Universal Images Group via Getty Images)

Highlights

The global coronavirus outbreak has been and will continue to be a massive shock for the airline industry due to the increasing number of travel restrictions and economic setbacks in key markets.
As the epicenter of the outbreak, China's airline sector has so far been hit hardest, likely spurring greater consolidation of the country's state-backed airline carriers as they absorb beleaguered private players.
In Europe, the outbreak will accelerate the ongoing process of consolidating the airline sector as well, as some companies merge while other weaker players disappear.

The coronavirus pandemic is ravaging the airline industry, with the most highly impacted countries of China, South Korea, Italy and Iran accounting for over a quarter of global passenger revenue alone. As panicked consumers continue to cancel or suspend their travel plans for fear of getting sick, and as more governments pursue containment measures and travel bans, an increasing number of airlines will be forced to either consolidate or go out of business. In China, this will likely lead to a market that's even more dominated by the state-backed carriers. Bigger airlines in Europe, meanwhile, will merge as revenue losses deal the final blow to their smaller competitors. But while so much is still unknown about how the outbreak will unfold in the weeks ahead, what remains certain is that the airline industry is headed for even more unexpected turbulence....

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