Airlines may suffer $100b loss, Cambodia’s airlines hit hard by drop in tourist numbers

Aircraft and employees on the tarmac at Phnom Penh International Airport. KT/Chor Sokunthea

Cambodia’s handful of locally incorporated airlines are facing the global impact on travel curbs and the rapid spread of COVID-19.

Almost airlines have reported drop in passenger yields and route cutbacks while tourists have been dropping continuously since the outbreak started in late December 2019.

In Cambodia, the situation was worsened by the ban on online gaming which drive away tens of thousands of Chinese visitors and impacted incoming travelers to all three of Cambodia’s airports.

Sihanoukville airport is facing its biggest challenge after it experience record passenger arrivals and departure in 2019 where almost all airlines established here moved their hub to the coastal city to cater for the predominantly Chinese travelers.

Khmer Times has been reliably informed that COVID-19, ban on online gaming, massive road repair works and travel curbs in China greatly impacted all three international airports.

Overall, the aviation industry is facing increasing turbulence in the wake of the global coronavirus outbreak, with industry experts estimating potential revenue losses of well above $100 billion amid widespread flight cancellations.

“In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse,” said Alexandre de Juniac, director-general and CEO of the International Air Transport Association, in a statement issued last week.

He described the rapid shift in the industry caused by COVID-19 as “almost without precedent”.

In its most recent analysis, the association is estimating the global airline passenger business to lose $63 billion to $113 billion, depending on how widely the virus spreads.

In a report published less than three weeks ago by the IATA, the estimated loss stood at less than $30 billion, with the association assuming only China-related market impact.

Since then, the outbreak has spread to more than 100 countries, with more than 110,000 confirmed cases. South Korea, Italy, Iran and Japan are among the most affected countries outside China, although the growth of new cases in China has seen a continuing decline.
Tightened policies

Governments around the world are tightening travel policies as both businesses and individuals grow more cautious about flying－two trends that pose a threat to the aviation industry.

While the World Health Organization advised against “the application of travel and trade restrictions to countries experiencing COVID-19 outbreaks” and claimed that travel bans are “usually not effective in preventing the importation of cases”, the United States, Russia, Japan, India, Australia, Israel, Saudi Arabia, Democratic People’s Republic of Korea and Republic of Korea are among countries that have imposed restrictions on travel to and from other countries.

Italy decided on Monday to extend its lockdown zone－initially included only the Northern Lombardy region－to the entire country. Travel restrictions, ban on public events, closure of schools and public spaces are affecting all 60 million residents in the country.

Besides governments, major global businesses are encouraging employees not to travel.

According to a recent survey by the Global Business Travel Association published on Tuesday, more than 40 percent of its member companies have canceled or suspended all international travel, and 95 percent have canceled or suspended most or all business trips to China. The trend is similar in terms of domestic travel, the association said. China Daily