The International Civil Aviation Organization (ICAO) has announced publication exploring recovery scenarios for the airline industry, that predict a possible loss of international passenger revenue of USD 115bn, the organization said.
The ICAO examined both a V-shaped recovery and a U-shaped path compared to a baseline scenario of originally planned international traffic. The V-shaped recovery would result in a potential USD 90 billion loss in gross revenues for the first half of the year from lost international passenger traffic. The U-shaped recovery predicts an international passenger revenue loss of USD 115 billion.
Under a V-shaped path, ICAO estimates that airlines will reduce their seats offered by 37%, with an overall reduction of 411 million passengers. The U-shaped path foresees a 48% reduction in seats offered by airlines, with an overall reduction of 535 million passengers.
The V-shaped scenario sees airline international seat capacity reduced by 77% of a baseline scenario in April 2020, with the reduction lessening to 63% down from baseline in May and 33% down from baseline by June of this year. The U-shaped recovery sees international seat capacity falling by 77% by April of 2020 and continuing a further decline to 78% down from baseline in May and June of this year.
As a result in the drop in demand for international air service, ICAO references UNWTO (World Tourism Organization) estimates that anywhere from five to seven years worth of tourism growth fill be lost due to the coronavirus pandemic, which represents USD 300 billion to USD 450 billion losses in international tourism receipts.