Airlines will be hit hard by coronavirus

STOCKMARKETS IN China fell by nearly 8% on February 3rd—the largest single-day fall since 2015—as fears about the economic impact of the Wuhan coronavirus increased. Of the industries affected by the epidemic, perhaps none will be hit as hard as travel. In recent weeks, hotel occupancy in China has fallen by 45% year-on-year, according to analysts at Citigroup, a bank.

Investors in Chinese aviation are right to be nervous. Some previous pandemics have caused huge drops in airline traffic. From peak to trough, Asian airlines’ monthly passenger numbers dropped by 35% after the SARS outbreak in 2003; for Cathay Pacific, Hong Kong’s flag carrier, traffic fell by nearly 80%. The impact on some airlines of the Ebola outbreak, which started in West Africa in 2014, was still more severe.

Compared with previous pandemics, Ebola and SARS hit airlines disproportionately hard. Passenger air traffic after the start of an outbreak normally goes back to pre-pandemic levels after 7 to 9 months. But with SARS the trough was much deeper than for other flu outbreaks in Asia, including MERS, a form of coronavirus that emerged in Saudi Arabia in 2015, as well as for the Zika virus in Brazil.

Tourists and business travellers may think that staying away from affected places is entirely rational during such outbreaks. But the World Bank estimates that 90% of economic losses during any outbreak arise from “irrational” efforts of the public to avoid infection in ways that do no such thing.

The travel industry should brace for major disruption as governments impose travel bans on Chinese visitors to stop the spread of the disease. On February 3rd the United Arab Emirates, one of the world’s biggest air-travel hubs, said it will suspend flights to and from Chinese destinations outside Beijing. It is unlikely to be the last to do so.

Good

It was a dress rehearsal by china,testing biological weapon on their citizens as guinea pigs,they must have accounted for it also.Part of their data collection.

👍 👌

Hmmm! An attack on air travel. The biggest pollutant to the upper atmosphere.

It’s going to be worse than the current worst case scenarios

Investors in any China's stock not just in aviation, is like dumping your money in the ocean & gone w the wind! Fake news, fake stories & fake evidences & there is nothing U can do about it. Wake up, people, stay away from China, anything China touches is misery!

WON'T *SOMEBODY* THINK OF THE CAPITALISTS?!

You fools. In order to have any industry, you need living people. The only thing that matters at this point in time is containing this virus.

They too must suffer the consequences that life offers.

Pharmaceutical and masks industries are popping open the champagne bottles

Especially to Asia

Yes, quite. The cruise industry will be harder hit. Trips to Asia or the South China Sea starting in Shanghai will be cancelled.

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