Coronavirus: Why it could damage the travel industry far worse than SARS did

Airlines and passengers are on guard as authorities try and contain the new flu-like coronavirus that originated in Wuhan, China.

By their nature, airlines play a key part in the spread of viruses. It's inevitable that illnesses will find their way onboard planes as millions of people fly around the world.

In 2003, SARS killed nearly 800 people and cost the travel industry an estimated US$33 billion.

Here's a look at industry concerns around the current coronavirus outbreak.

Drop in demand:

The biggest concern for airlines is a drop in travel demand if the virus becomes a pandemic.

During the SARS outbreak, passenger demand in Asia plummeted by 45 percent, according to the International Air Transport Association (IATA).

This saw airlines such as Cathay Pacific to cut operations by 40 percent and report a financial loss as a result. A similar situation this year could cripple the airline, which is already dealing with a drop in travellers to its Hong Kong hub due to political unrest. 

The number of Chinese travellers has increased nearly 1000 percent since SARS:

The travel industry is much more reliant on Chinese travellers since the 2003 SARS outbreak.

In Australia, Chinese travelers account for more than 15 percent of international arrivals - up from just 4 percent in 2003, according to Moody's ratings service.

Those travellers, who arrive mostly via mainland carriers, often take domestic flights once they arrive in Australia, pointing to the potential for knock-on effects for even the smallest of local economys. 

Since 2003, the number of annual air passengers has more than doubled, with China growing to become the world’s largest outbound travel market.

In 2003, 6.8 million passengers from China traveled on international flights, and that number has grown by close to 10 times to 63.7 million in 2018, according to data from China's aviation authority.

Global airline revenue in 2003 was US$322 billion compared to 2019 when that number had risen to US$838 billion.