(Recasts with comments by Southwest Airlines CEO)
By David Shepardson and Aradhana Aravindan
WASHINTGON/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, while
the head of a large U.S. airline said the drop-off in travel
demand seemed driven more by fear than economics, similar to
what happened after the disasters of Sept. 11, 2001.
"We could discount prices tomorrow and it wouldn't do any
good," Southwest Airlines Co Chief Executive Gary Kelly
said at an aviation conference in Washington.
Earlier, Kelly told CNBC: "9/11 wasn’t an economically
driven issue for travel, it was more fear, quite frankly, and I
think that’s what’s manifested this time. I think there’s
elements of both but it has a 9/11-type feel.
"Hopefully, we’ll get this behind us quickly."
The estimated revenue hit to the sector was made by the
International Air Transport Association (IATA). It was more than
three times a projection it made just two weeks ago and came as
British regional carrier Flybe became the first big casualty of
the slump in travel demand due to the crisis.
Airlines across the globe are rushing to cut flights and
costs, and warning of a hit to earnings, as the new virus that
started in China spreads, raising fears of a pandemic that could
plunge the global economy into recession.
"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.
(Reporting by David Shepardson in Washington and Aradhana
Aravindan in Singapore
Additional reporting by Sarah Young in London, Terje Solsvik in
Oslo, Jamie Freed in Sydney, Kate Holton in London and Laurence
Frost in Paris
Writing by Tracy Rucinski
Editing by Keith Weir and Matthew Lewis)
International Airlines (IAG)
