Last checked at 
(Adds more IATA comments, Southwest warning, analysts)
* IATA sees lost revenue of $63-$113 bln due to virus
* British regional airline Flybe enters administration
* Norwegian Air scraps profit guidance, cuts flights
* Turkish has to fly jet home empty after virus case
By Sarah Young and Aradhana Aravindan
LONDON/SINGAPORE, March 5 (Reuters) - The coronavirus
epidemic could rob passenger airlines of up to $113 billion in
revenue this year, an industry body warned on Thursday, more
than three times a projection it made just two weeks ago as the
virus continues to spread around the world.
The warning from the International Air Transport Association
(IATA) came as British regional carrier Flybe became the first
big casualty of the slump in travel demand due to the crisis.
Norwegian Air also scrapped its profit forecast for
2020, while U.S. budget carrier Southwest predicted a
$200-300 million hit to its first-quarter operating revenues.
"There are lots of airlines that have got relatively narrow
profit margins and lots of debt, and a cash flow shock like this
could certainly send some into a very difficult situation," IATA
Chief Economist Brian Pearce told a media event in Singapore.
Airlines across the globe are rushing to cut flights and
costs, and warning of a hit to earnings, as a new virus that
started in China spreads, raising fears of a pandemic that could
plunge the global economy into recession.
In a sign of the difficulties this is creating for airlines,
a Turkish Airlines jet was flown back to Istanbul
without any passengers on board on Thursday on orders from
Singapore after a passenger who had arrived on the same plane on
Tuesday tested positive for the virus.
IATA projected the hit to passenger airlines in lost revenue
from the crisis could be anywhere between $63 billion and $113
billion this year, depending on the virus's progression. On Feb.
20, it had forecast a hit of $29 billion.
The latest estimates equate to a drop of between 11% and 19%
compared with its 2020 industry revenue forecast in December.
IATA said its lower forecast was based on the virus being
contained in current markets with over 100 cases as of March 2,
while the higher estimate was based on a broader epidemic. Both
scenarios assume there will be a recovery by late summer.
The COVID-19 virus has killed more than 3,000 people and
infected tens of thousands more, mostly in China. But it has now
spread to more than 60 other countries, leading to travel and
other restrictions.
South Korea, Italy, and Iran have been particularly badly
affected. Germany, Japan, France, Spain, the United States,
Singapore and Hong Kong have all reported more than 100 cases.
Among the latest events to be cancelled is the world air
traffic management congress in Madrid, which had been scheduled
for March 10-12.
'INEVITABLE'
The failure of British regional airline Flybe comes less
than two months after a rescue deal for the company was agreed
by its owners and the UK government.
Despite its commitment to improving regional transport
links, the British government backed away from that deal due to
the scale of the hit to demand from the virus outbreak.
"All flights have been grounded and the UK business has
ceased trading with immediate effect," Flybe said as it entered
administration, a form of protection from creditors.
The failure of the airline, which has long struggled with
losses, not only puts around 2,400 jobs at risk but could also
see some regional UK airports struggle.
Flybe carried around eight million passengers a year between
81 airports and was owned by a consortium of Virgin Atlantic,
Stobart Group and Cyrus Capital.
Its collapse came a day after Ryanair CEO Michael
O'Leary told Reuters it was "inevitable" the coronavirus crisis
would lead to airline bankruptcies.
CANCELLATIONS
Norwegian Air, a pioneer of low-cost transatlantic
travel, has also been struggling for years due to cut-throat
competition and heavy debts built up during rapid expansion.
The company, which has repeatedly raised cash from
shareholders to stay in business, said on Thursday it was
scrapping its 2020 earnings guidance, which had predicted a
return to profit after three years of losses, due to the drop in
travel demand and disruption caused by the virus.
It also said it would cancel 22 long-haul flights between
Europe and the United States from March 28 to May 5, with routes
from Rome to Los Angeles, Boston and New York seeing a reduced
number of departures.
Norwegian shares, which have lost more than 50% of their
value this year, were down almost 7% at 1130 GMT.
Analysts say few airlines are likely to remain unscathed, as
both business and tourist travel is being affected.
The Global Business Travel Association said last week the
crisis could scythe $560 billion from spending on corporate
travel this year, a 37% drop from its 2020 global expenditure
forecast, as meetings and events are cancelled and companies
limit travel to protect employees.
Data provider ForwardKeys said on Thursday new flight
bookings to Europe from elsewhere in the world fell by 79% in
the last week of February, as the virus took hold in popular
tourist destinations such as Italy.
"The drop-off in bookings to Italy is even worse than we
have observed in the past for some of the most disruptive events
such as terror attacks," ForwardKeys Vice President Insights
Olivier Ponti said.
($1 = 0.7770 pound)
(Additional reporting by Terje Solsvik in Oslo, Jamie Freed in
Sydney, Kate Holton in London and Laurence Frost in Paris;
Editing by Mark Potter and Keith Weir)
