The International Air Transport Association (IATA) has warned that the current coronavirus outbreak could cost the airline industry nearly $30 billion.

The group’s initial assessment of the impact of COVID-19 outbreak reports that lost revenue for 2020 could hit $29.3 billion, and result in a 4.7 per cent hit to global demand.

The vast majority of the figure ($27.8 billion) would come from carriers in the Asia-Pacific region, with $12.8 billion lost in the Chinese domestic market alone.

The estimates are based “on a scenario where COVID-19 has a similar V-shaped impact on demand as was experienced during SARS”, which was characterised “by a six-month period with a sharp decline followed by an equally quick recovery”.

Global traffic had previously been forecast to grow by 4.1 per cent this year, so should the above estimates be accurate, traffic is set to contract by 0.6 per cent in 2020, resulting in “the first overall decline in demand since the Global Financial Crisis of 2008-09”.

IATA said that the estimated impact “assumes that the centre of the public health emergency remains in China”, and stressed that “It is premature to estimate what this revenue loss will mean for global profitability”.

But in a statement IATA’s director general and CEO Alexandre de Juniac warned that it would be “a very tough year for airlines”.

“These are challenging times for the global air transport industry,” said de Juniac. “Stopping the spread of the virus is the top priority. Airlines are following the guidance of the World Health Organization (WHO) and other public health authorities to keep passengers safe, the world connected, and the virus contained.”

Airline worldwide have been impacted by the outbreak, suspending routes to mainland China and reducing services to other Asia-Pacific destinations due to reduction in demand.

Hong Kong-based Cathay Pacific has been particularly badly hit, with passenger capacity having been cut by 40 per cent for February and March.