- [Narrator] Canceled flights, empty planes,
and eerily quiet airports.
This is what the impact of the coronavirus epidemic
looks like through the lens of travelers,
and the effect is visible in the skies too.
One year ago,
this is how many planes were flying above China,
and now, that same airspace looks like this.
The epidemic has led to an 80% drop
in traffic at China's busiest airports.
The reduction in global capacity
measured by how many seats remain grounded
is greater than it was following SARS
and even greater than after 9/11.
- I think we have a whole different ball game now
compared to the 2001, 2003 issues.
- [Narrator] So what impact is this having
on the aviation industry?
- If we look back in 10 years' time,
will this be seen as a blip or a game-changer?
(equipment humming)
- [Narrator] The financial implications
of suspended flights and routes are huge.
- China's become the second biggest aviation market globally
with airlines like American Airlines
flying as many as 28 flights weekly.
Obviously, now with the coronavirus outbreak,
that's dropped down to zero.
- [Narrator] To make matters worse,
the cancellations and suspensions
came directly after Chinese New Year
when airlines normally see a boost in ticket sales.
- [Ian] Beyond impacting just Chinese air traffic,
you're looking at where do those passengers connect
beyond China, where do they go when they're departing China?
- A narrow-body aircraft is costing in the order
of $10,000 a day, whether that's been financed
or whether it's being leased.
If you're not flying it,
it's not just the $10,000 per day per aircraft.
You've got crews sitting around,
flight crews, cabin crews,
yet the aircraft itself will still need maintenance.
A new wide-body aircraft is going to be costing
as much as $50,000 a day.
- [Narrator] Cathay Pacific and Asiana Airlines
have both asked thousands of staff to take unpaid leave.
Hong Kong Airlines announced it would lay of 400 workers.
Its chairman said the changes
were about ensuring its very survival,
as reported by local media.
Globally, IATA is forecasting
a $29.3 billion loss in revenue for 2020.
For context, the Icelanic volcano eruption
that disrupted air traffic across Europe for several days
cost the industry $1.7 billion in lost revenue.
Though nobody knows how long the epidemic will last,
the industry is already bracing for a hit
that is expected to be harder than after 9/11 or SARS.
- [Ian] SARS is kind of the benchmark here.
The global share of the Chinese economy
was so much lower than it is now,
and now, where China's 19% of the global economy,
it's a much bigger impact.
- With the SARS outbreak in 2003,
we saw it took a number of months for the airlines
to recover both demand and profits.
What we're really waiting to see now
is how long the impact of the coronavirus will be,
and that really depends on when we hit peak,
for which we really have no estimate at the moment.
Back in 9/11 in 2001,
it took about nine months before we saw
really the industry recover from the impact of the events.
Now, with the coronavirus, it's a very different situation
and it's difficult to give an assessment,
but analysts are expecting that with the coronavirus,
this could actually last quite a bit longer.
- [Narrator] After years of fast growth,
the epidemic could cause the global airline industry
to contract for the first time since the Financial Crisis
according to industry analysts.
Airlines say they're looking into ways to limit the damage,
with Chinese companies hoping they will get support
from the government like they did after SARS
with bailouts, tax breaks, and mergers.
- In terms of the types of airlines
that could be affected by this,
it could really be across the whole spectrum.
It won't just be small airlines or large airlines
or airlines with a specific type.
This will be impacting virtually every airline
that operates in and out of China.
(pleasant electronic tones)