See what Shanghai, China, looks like as coronavirus fears linger

Hong Kong (CNN Business)Qantas Airways is warning of a big hit from the novel coronavirus outbreak, as it slashes flights across Asia.

The airline reported Thursday that the “negative impact” from the coronavirus outbreak will likely cost it between 100 million and 150 million Australian dollars ($67 million to $100 million) in pre-tax profit for the second half of the company’s fiscal year.
Despite the warning, shares in Qantas (QABSY) rose 5% in Sydney.

As demand to Hong Kong, Singapore and Japan continues to plummet, Qantas will reduce flights across Asia by 15% until the end of May, CEO Alan Joyce said during an earnings presentation Thursday. The airline had already canceled its service to Shanghai until the end of May.

“We have a lot of flexibility in how we respond across the (company). We can extend these cuts, cut deeper if we need to, or add capacity back in,” Joyce said.

The company reported pre-tax profit of 771 million Australian dollars ($512 million) for the six months ended in December, down 4 million Australian dollars ($2.7 million) from the same period a year earlier.

Qantas also announced a share buyback of 150 million Australian dollars ($100 million).
The global airline industry is facing huge financial losses, after dozens of carriers canceled or reduced flights to China and other Asian countries because of the coronavirus outbreak. The economic damage will likely be worse than the $7 billion hit wrought by the 2003 SARS epidemic.
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