According to the International Air Transport Association (IATA), airlines from all over the world could lose up to $113 billion in sales if the virus is not contained quickly. Just two weeks ago, the estimated loss had only been hovering around the $30 billion mark.
The scope of these losses would likely mimic the drop in revenue experienced during the 2008 financial crisis. The IATA said that this loss of revenue would equate to a 19% loss of business.
Airlines with the bulk of their business in Asia and Europe will likely see the most significant losses. If the virus is contained more quickly than estimated, the anticipated losses may be revised downward.
As of Thursday, China, Iran, Italy, Japan, and South Korea have seen the worst of the outbreak. An increasing amount of cases and deaths in the US have sounded the alarm bells with the domestic airline industry. On Wednesday, both United Airlines and JetBlue announced that they were reducing the number of flights. United is also going to undergo a hiring freeze and will launch a program for unpaid voluntary leave for its employees. Shares of United (UAL) and JetBlue (JBLU) closed up on Wednesday on the heels of the news.
Many airlines are also suspending the fees associated with changing flights, giving more flexibility to travelers.
The smaller and more regional Asian airlines are the most at risk of being hit hard as a result of the travel disruptions. In addition, UK regional carrier Flybe suspended operations on Thursday.
Global airline giant Lufthansa announced on Thursday that it has already canceled 7,100 European flights during the month of March. The majority of these flights are for routes within Germany or to Italy. The cancellations account for approximately 25% of the total capacity of Lufthansa.