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COVID-19 outbreak slows travel industry

The Civil Aeronautics Board said Monday the novel coronavirus disease 2019 outbreak significantly impacted the Philippine travel industry, as local airlines reported an increase in canceled bookings.

“Overall, they’re taking a hit specifically in Chinese territories [where] there’s a travel ban. There’s a significant impact to local airlines,” CAB executive director Carmelo Arcilla said. 

Arcilla said 30 percent of Cebu Pacific’s flights were affected by COVID-19, while more than half of the flights of Philippine Airlines and Air Asia Philippines were also dampened.

The Philippines imposed a temporary travel ban covering visitors from mainland China, Hong Kong, Macau and Taiwan.  The restrictions on flights to and from Taiwan were eventually lifted.

Arcilla said the desire of the travelers around the world to travel to Asian destinations such as the Philippines also weakened because of COVID-19. 

“The number of no-show and [canceled] bookings are increasing. Hopefully, the virus would fade so the sector can recover,” Arcilla said.

Tourism Secretary Bernadette Romulo-Puyat earlier said foregone revenues from the COVID-19 outbreak were expected to reach P42 billion from February to April this year. She said the country was expected to lose P16 billion worth of tourism revenues in February alone.

The International Air Transport Association earlier said an initial assessment of the impact of COVID-19 showed a potential 13-percent full-year loss in passenger demand for carriers in the Asia-Pacific region.

It said that with an initial growth forecast of 4.8 percent for the region’s airlines, the net impact of COVID-19 would be an 8.2-percent full-year contraction compared to 2019 demand.

The IATA said this would translate into a $27.8-billion revenue loss in 2020 for carriers in the Asia-Pacific region―the bulk of which would be borne by carriers registered in China, with $12.8 billion lost in the China domestic market alone.

It said carriers outside Asia-Pacific were forecast to bear a revenue loss of $1.5 billion, assuming the loss of demand was limited to markets linked to China.

This would bring total global lost revenue to $29.3 billion (5 percent lower passenger revenues compared to what IATA forecast in December) and would represent a 4.7-percent  hit to global demand.

IATA forecasts a global RPK (revenue per kilometers) growth of 4.1 percent in December.  It said the loss from COVID-19 impact would negate the expected growth this year, resulting in a 0.6-percent global contraction in passenger demand for 2020.

These estimates are based on a scenario where COVID-19 would have a similar V-shaped impact on demand as was experienced during SARS. That was characterized by a six-month period with a sharp decline followed by an equally quick recovery. 

SARS was responsible for the 5.1-percent  fall in the RPKs carried by Asia-Pacific airlines in 2003.

Topics: Civil Aeronautics Board , novel coronavirus disease , Carmelo Arcilla
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