Latest analysis from the International Air Transport Association (IATA) estimates that coronavirus could cost the global airline industry up to $113 billion.

The figure is up significantly from the $29.3 billion estimate which IATA published in mid-February.

The association said that global revenue losses for airline passenger businesses would now be between $63 billion and $113 billion depending on the continued spread of the virus. The analysis does not include estimates for the impact on cargo operations.

IATA said that since it provided its February analysis, “the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China”.

The association added that airline share prices have fallen nearly 25 per cent since the beginning of the outbreak – 21 percentage points greater than the decline seen at a similar stage during the SARS crisis of 2003.

The analysis looked at two scenarios – “Limited Spread” (looking at the number of markets with over 100 confirmed COVID-19 cases as of March 2), which would result in an 11 per cent passenger revenue loss equal to $63 billion – and “Extensive Spread” (looking at markets which currently have ten or more cases), which would result in a 19 per cent loss equating to $113 billion.

IATA said that the second scenario “would be on a scale equivalent to what the industry experienced in the Global Financial Crisis”.

The association said that falling oil prices could help mitigate the situation, cutting 2020 fuel bills by up to $28 billion (on top of any savings as a result of reduced operations), but warned that this would “not significantly cushion the devastating impact that COVID-19 is having on demand”. It also added that “hedging practices will postpone this impact for many airlines”.

Commenting on the analysis Alexandre de Juniac, IATA’s Director General and CEO, said:

“The turn of events as a result of COVID-19 is almost without precedent. In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse. It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis.

“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times.”