Coronavirus Eats Airlines Business, Companies Cancel Flights, Shares Drop

Coronavirus Eats Airlines Business, Companies Cancel Flights, Shares Drop

European airlines ramped up their warnings over the coronavirus pandemic Friday, with British Airways owner IAG and Finnair marking a hit to profits and easyJet reporting a significant fall in demand into and out of a virus-affected region in Italy.

Coronavirus Eats Airlines Business, Companies Cancel Flights, Shares Drop

All three airways joined competitors in saying cost cuts to help weather a storm of unknown severity and duration.

The novel coronavirus, which emerged in December 2019 in China, has sent the demand for travel slumping in recent weeks because the outbreak has surfaced around the globe, raising fears of a pandemic that could tip the global economy into recession.

The crisis is exacerbating deep-rooted problems in an airline industry fighting with overcapacity, environmental pressures, and the grounding of Boeing’s top-selling jetliner.

IAG, which owns Iberia and Aer Lingus, normally gives an earnings forecast at this time of year; however, it stated the ambiguity over the impact and duration of the coronavirus pandemic meant it couldn’t give accurate steerage at this stage.

British Airways has, in recent days, suspended flights to and from Italy, Singapore, and South Korea, after it canceled all direct flights to China last month.

It also said flight suspensions would reduce capacity growth this year, although CEO Willie Walsh stated the group may start to add capability if other airlines failed.

Lower air traffic growth estimations triggered Spanish travel technology firm Amadeus to forecast slower 2020 core revenue growth Friday; however, it stressed the scope did not yet account for the unsure impact of the virus epidemic.

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