Topline: Aviation has been one of the industries most impacted by the
coronavirus outbreak and Air France-KLM and Qantas have revealed that the
pneumonia-like virus could wipe hundreds of millions off their earnings this
year.
·
Franco-Dutch airline
Air France-KLM said the impact of lower demand and flight cancellations to
mainland China until the end of March could wipe $215 million off their
earnings between February and April.
·
The airline has suspended its flights to Shanghai and
Beijing until March 15. Routes to mainland China account for more than 5% of
its traffic, according to Reuters, while the company estimates a
return to normal service on March 29.
·
The company’s shares
were down more than 7% earlier on Tuesday, following the news.
·
Earlier on Thursday,
Australia’s flagship carrier Qantas warned that it could lose up to $99 million
in net profit in their 2020 earnings, as it has cut back on 16% of flights between Australia and Asia
until May.
·
Routes cut back
include flights to Hong Kong and Singapore, as the carrier faces lower demand
for travel to the region because of the potentially deadly, pneumonia-like
virus.
·
China’s government is
reportedly gearing up for a rescued plan for HNA Group that could see its
flagship Hainan Airlines, and its other aviation assets sold off, according to
Bloomberg.
·
The Hainan-based
travel and leisure conglomerate faced financial pressure before the coronavirus
outbreak, and delayed salary payments to staff in December, as it grappled with
the costs of a debt-fueled acquisition spree that included the purchase of a
25% stake in Hilton Worldwide.
Key background: Airlines were among the first economic
casualties of the coronavirus, with a raft of international airlines suspending
all flights to China, which was the world's third biggest aviation market.
Flight cancellations, domestic and international travel restrictions have meant
that China's aviation market is now smaller than Portugal, according to
analysis from OAG Aviation. United, Delta and American have suspended some
flights to China, while Cathay Pacific, Hong Kong’s flagship carrier, is facing
serious financial challenges and a 90% drop in its flights to the mainland,
because of Covid-19. The airline has also asked its 27,000 staff to take three
weeks’ unpaid leave in a bid to save cash.
In numbers: More than 2,100 people who had the coronavirus, officially
named Covid-19, have died, while more than 75,000 are infected across dozens of
countries, but overwhelmingly in mainland China. More than 16,000 have
recovered after being treated in hospital.
Tangent: Cruises have also fallen victim to fears about the spread of
the disease. Royal Caribbean cancelled 18 cruises because of coronavirus, while
several ports around Asia have blocked cruises from docking over the
past few weeks. Some 3,700 passengers and were left stuck inside a quarantined
cruise ship docked in Japan because the virus was found on the ship. More than
500 people tested positive for Covid-19 onboard, with the numbers rising
everyday. Two passengers in their 80s who were aboard the ship, died.
Passengers who tested negative for the virus started disembarking yesterday.
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