Coronavirus SARS-CoV-2 (formerly 2019-nCoV) reported the first deadly infectious disease of on 11 January 2020. First cases were detected and China has alerted the World Health Organization (WHO) of several flu-like cases in Wuhan, the capital of Central China's Hubei province with 11 million population. Patients have been quarantined and health authorities commenced work on tracing the source of the flu in last day of 2019. WHO has announced that 83,774 confirmed coronavirus cases (primarily in mainland China) and 2,867 deaths have been linked to the virus in 28 February 2020. This paper tries to describes the spread of the disease in Asia and discusses its impact on the airlines economy. Corona was an unexpected negative shock. The most significant negative efects were on the demand side, with national and international flights related to civil aviation severely afected in the short run. Fear and panic continuing once the outbreak was not under control. Treatment or vaccine was not found yet and the air transportation stock market has collapsed.
1. Introduction
while China plans to invest USD 130 billion in airports
which is supported the claim of the rise of both full
serAir transportation is a major industry in its own right vice and low-cost airlines [
This loss caused significant financial problems for
2. The Threats Facing The Malaysia Airlines [19]. The endemic of a disease
demonAviation Industry strates how a single person could spread disease via
air travel and SARS was one of a number of outbreak
The first change was the deregulation of the airline global events in 2003 [20]. Air China Flight 112 was a
industry in 1978. A fundamental change in airline ser- scheduled international passenger flight on 15 March
vices was occurred after the Civil Aeronautics Board 2003 that carried a 72-year-old man infected with
seeliminated restrictions on routes and fares. The sec- vere acute respiratory syndrome [21]. This man
inond major change was the dramatic downturn in the fected 20 passengers and two aircraft crew, resulting
US airline industry following the attacks of Septem- in the dissemination of SARS to northern Mongolia
ber 11, 2001. Although revenues had decreased at the and southern Thailand [22]. When SARS hit, global
major airlines before the 9/11 attacks, the subsequent passenger trafic fell by 18.5% in April 2003 compared
changes in travel behavior resulted in a 10 to 20 per- to a year earlier, with a drop of almost 45% in
Asiacent decrease in national air transport capacity in just Pacific [23]. The COVID-19 outbreak will continue
a matter of weeks. This dramatic change has high- to be centered in China and spread to other markets.
lighted the key interdependencies between the econ- Thus, it expects the impact on airlines will be severe
omy and the airline industry [
In this study, the loss on decreasing stock-exchange value of some of the largest Asia-Pacific Airlines has been monitored during the spread of the coronavirus COVID-19. It is assumed that these sample; SingaFigure 1: Coronavirus: Global Confirmed Coronavirus pore Stock, Air China Ltd (0753), China Eastern AirCases, Deaths and Recovered Numbers lines Corp Ltd (0670), China Southern Airlines Co Ltd (1055), Hainan Airlines Co Ltd B (900945), Singapore Airlines Ltd (SIAL), Air Asia Bhd (AIRA), Garuda In4. Methodology donesia Persero Tbk (GIAA), ANA Holdings Inc (9202), Japan Airlines Co Ltd (9201) is represented the AsiaThe COVID-19 virus has been found in 30 countries, Pacific region. The starting point is determined as a and growth of COVID-19 cases has kept on rising across December 31 that is first cases detected China and the the world. In the Fig. 1, global confirmed coronavirus World Health Organization (WHO) was alerted for sevcases, deaths and number of recovered are seen. eral flu-like cases in Wuhan.
The pandemic’ social and economic efects may bring For this reason, all active stock days from January to the shutdown in Asia-Pacific airlines to prevent the 1st to the present day have been analyzed and illusspread of coronavirus in homeland and overseas. The trated. Table 3 introduces the Asia- Pacific Airlines International Air Transport Association has published stock exchange securities for round forty days. Airline an initial assessment of the impact of COVID-19 which stocks are taking a hit in premarket trading Monday, estimates total global lost airline revenue could be as amid growing worries about how the global spread high as $29.3 billion, with a potential 13% full-year loss of COVID-19 will impact travel. The largest drop in of passenger demand and $27.8 billion revenue loss in history occurred on February 2020 due panic over the 2020 for carriers in the Asia-Pacific region [25]. Air- 2019-2020 coronavirus outbreak. lines registered in China would be most afected with Garuda Indonesia posted the biggest loss in the most $12.8 billion lost in the China domestic market [26]. recent month, it will continue to lost money over time. China is currently the world’s second-largest civil avi- The stock exchange securities of Air Asia, China Eastation market, behind the United States, hauling in $151 ern Airlines, China Southern Airlines, Air China, Japan billion in revenue last year, according to Xinhua. Ma- Airlines, ANA Holdings, Hainan Airlines, and Singajor Chinese carriers Air China (AIRYY), China South- pore Airlines sharply dropped. ern (ZNH) and China Eastern (CEA) have grown five The Fig. 2 shows below the 9 biggest Asia-Pacific to six-fold compared to 2003 (Frost, 2020). It is shown Airways Stocks Prices for the last 5 years in Januarythat China Air which is the flag carrier and one of the February. It is clearly shown that Asia Pacific airlines, major airlines of the China based on last five-year Jan- which have always been profit taking in the last 4 years uary flight trafics. Table 1 display the information of with 2 exceptions, faced dramatic declines in 2020. Revenue Passenger-Kilometers (RPK), Revenue Tons - Especially, Garuda Indonesia and Air Asia compaKilometers (RTK) and Revenue Freight Tons - Kilome- nies really afected Coronavirus (COVID-19) outbreak ters (RFTK). in Asia.
Air China Flight trafic, which consists domestic and international flight, dwindled unusually on the basis of the previous year data on RTKs, RPKs, RFTKs and 5. Conclusion number of passengers carried. Besides, freight transportation via air cargo that has always been an integral Coronavirus fears drive stocks down especially in Asia component of economy drastically reduced. Table 2 markets. The virus, which has now spread to 47 countries (28 February), has put pressure on businesses and Not only Asian airlines but also Among the moresupply chains around the world. Because of the coro- active carriers stock price dropped such as shares of navirus, Asian markets closed sharply lower and Eu- United Airlines (Holdings Inc. UAL) -26%, Delta Air ropean stocks tumbled at the start of trading. (Lines Inc. DAL) -21%, American Airlines (Group Inc.
The widening scope of the health crisis threatens to AAL) -31%, Southwest Airlines (Co. LUV) -15%, Deutsche overwhelm global supply chains, especially in China, Lufthansa (AG LHAG) -29%, Air France KLM (SA AIRF) the world’s second-largest economy after the United -30%.
States. In addition, the outbreak could crush consumer Initially, many businesses, investors, and companies demand, as people limit travel or stay home even with- expected the coronavirus outbreak to be similar to the out a government order to do so. Due to the coron- 2003 eruption of SARS, if perhaps a bit more painful. avirus outbreak consumers change their behavior so However now that the virus has spread to the Middle they stop flying, they don’t take the vacation, they can- East (Especially Iran) and Europe (closing big chunks cel even the business trip. As a consequence, airlines of Italy’s northern economic heartland and even spreadparticularly Asian airways flight and their load factor ing into Spain) the worry is that what began as a confall down as it mentioned above now therefore their tained outbreak could turn into a pandemic, as the World stock prices collapsed [27]. Health Organization warned in February 2020. And finally, stock markets are starting to recognize the uncertainty.