The full impact of the coronavirus outbreak, and its expected lengthy, economically painful aftermath, are impossible to predict. Fitch Ratings' corporate group has collated a series of assumptions for 2021 that convey Fitch's current estimate of the impact, used in rating cases to facilitate rational discussion of what responses corporates can be expected to undertake and where rating levels should move. Each rating action commentary published by Fitch will also outline the assumptions we make for both the headline impact of current conditions, and, importantly, for individual issuers' ability to respond.

Most industries in normal times generate free cash flow at the post-dividend level. Over successive crises corporates have made substantial changes to their cost structures, both in operating and capital budget terms, and they will be able to mitigate some elements of the unprecedented topline pressure in the current crisis, despite our estimate of revenue decline. The near future for corporate revenues in many sectors is nonetheless bleak, and exceeds prior crisis downturns, often by large multiples. Industries' capacity to respond will be tested to the full.

Headline numbers for key industrial and services sectors are outlined in the report 'What Investors Want to Know: Our Initial Corporate Assumptions for 2021', published 9 April 2020. Fitch uses these headline numbers as the starting point for the forecasts that underpin its rating actions. These assumptions are far from point estimates in current markets, but give users a sense of our expected corporate trajectory as lockdowns lead to broad-based cost-cutting, dampened consumer sentiment and revenue uncertainty.

Among other things Fitch noted:

• Declining air traffic, forecast to fall by 45%-50% across the industry in 2020 and partially recover in 2021, although they will still probably be 15%-20% below 2019 levels. For comparison, the highest yoy fall previously seen in the US market, the most developed, was by 5%-6%, seen after 9/11 and again in 2009.
• A drop in global car sales, which is now forecast to be down by 15% in 2020 and, while recovering in 2021, to be 8% lower in 2021 than their 2019 level. For comparison, car sales in 2009 fell only 3% globally, as western market weakness was offset by rapid Chinese market growth of 46% yoy, which also aided the 26% yoy recovery in 2010.
• Falling discretionary retail sales, forecast to fall by around 30% in 2020 in the US and Europe, and to subsequently increase in 2021 to 8%-10% below 2019 levels. This compares to the fall in U.S. discretionary retail sales of around 9% in 2009, following a 2% decline in 2008.