Airlines warn of business slowdown from coronavirus outbreak
Some airlines say the coronavirus outbreak roiling China could cause their business to take a nosedive this year.
European carrier Air France-KLM warned Thursday that its earnings could drop by as much as 200 million euros, or $216 million, by April as the virus crisis slams the global air travel industry.
Australia’s Qantas airline similarly expects to slash as much as 150 million Australian dollars, or $100 million, from its earnings this year because of the carrier’s decision to cut its flight capacity to Asia by 16 percent until at least the end of May amid the outbreak.
“These past few months have been extraordinarily difficult for the tourism industry and we’ve tried to minimize the impact of our capacity reductions as much as possible,” Qantas chief executive Alan Joyce said.
American Airlines also expressed concerns about the potential financial impact of the virus in the annual report it filed with regulators Wednesday. The Texas-based carrier said its temporary suspension of flights to mainland China — the epicenter of the outbreak — and the possibility of a time of “significantly reduced” travel demand “has and will likely continue to result in significant lost revenue.”
Qantas and Air France-KLM have also halted flights to mainland China amid the coronavirus outbreak that has killed more than 2,100 people. Qantas’ latest service cuts will also affect trips to Hong Kong and Singapore, where Joyce said demand has weakened. Jetstar, Qantas’ secondary carrier, will also slash its services by 14 percent.
“We know demand into Asia will rebound. And we’ll be ready to ramp back up when it does,” Joyce said.
Big airlines including American, Delta and United moved to cut flights to China after the World Health Organization labeled the coronavirus outbreak a global health emergency. Officials in the US and other nations have also urged travelers to avoid trips to the country because of concerns about the virus.
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