The 30 day travel ban between the United States and Europe could cost US$2 billion. Midway between a ban running from mid-March to mid-April, revenue from about 5.5 million seats will be lost. It will be a devastating blow to an industry being brought to its knees by both the closure of borders and cessation of travel demand.
24,500 transatlantic flights will not run this month
Analysts at Cirrum have crunched travel data to come up with this number. They say 24,500 transatlantic flights were timetabled to fly between 14 March and 12 April. As Cirrum points out, while US$2 billion may not seem like a lot of money, this is just for the transatlantic market over a 30-day period.
Cirrum’s Director of Market Development, Alistair Rivers, said;
“While US$2bn may seem like a small figure in comparison to what the major US carriers generate alone for Atlantic flights, this represents a significant loss considering the ban only applies to Schengen countries and the UK over a 30-day period.
“As airlines around the world react to government restrictions placed on travel, their clear objectives for now are to help contain the spread of the virus–protecting people–and at the same time try to survive this unprecedented crisis.”
The situation is deteriorating on a daily basis
And IATA expects Europe to endure the worst of this. With borders closed and routes suspended, including the all-important transatlantic market, Europe’s airlines face a financial abyss. As the inevitable global recession kicks into gear, forward passenger demand will remain subdued even when borders re-open. IATA expects a 46% drop in revenue-per-passenger-kilometer this year.
No winners, lots of losers
These numbers are set to deteriorate further as countries tighten lock down requirements and show no sign of easing cross border restrictions. It is a diabolical situation that will see airlines going out of business. These Cirrum and IATA forecasts are just beginning to scratch the surface regarding the long-term financial impact on airlines.