Airlines plunge as global stock markets suffer from coronavirusEuropost
Airlines and travel companies bore the brunt of the latest chaos on global markets as the spread of the coronavirus triggered more panic-selling. At the end of the biggest weekly rout in share prices since the financial crisis, the boss of British Airways owner IAG warned the deadly outbreak could push struggling airlines 'over the edge'.
The comments came as Easyjet reported a big drop in demand for flights in and out of Italy, Finnair warned profits could be hit and United Airlines cut services to Japan and South Korea. At the end of the biggest weekly rout in share prices since the financial crisis, the boss of BA owner IAG warned the deadly outbreak could push struggling airlines 'over the edge'
As shares tumbled around the world – taking losses this week to €5.3 trillion – IAG fell another 8.4% while travel agent Tui was down 8.5%.
IAG, which owns Iberia, Vueling and Aer Lingus alongside BA, has lost almost a quarter of its value, or €3.5 billion, since markets opened on Monday.
Tui has fallen nearly 30 per cent this week while Easyjet has shed 27% and Ryanair 20%.
Shares in European rivals Lufthansa and Air France have also plunged more than 20% this week.
IAG and Easyjet issued updates to investors, bracing them for more pain as bookings fall. IAG chief executive Willie Walsh said that flight suspensions to China and cancellations on Italian routes would reduce the amount of passengers it carries this year. He added that business travel had been affected as conferences have been cancelled and work trips delayed. Walsh insisted IAG was strong enough to withstand this shock, but predicted it would be too much for some other airlines. Walsh said some airlines would be 'pushed over the edge'. He added: 'We are well able to adjust to this situation because our business is in great shape. 'It's the failing airlines who will be most affected by this. So without question, there will be more consolidation as a result.'
There are growing fears that the Summer Olympics in Tokyo – another key destination for BA – could be another casualty of the outbreak.
The International Air Transport Association has estimated the potential cost of the outbreak to the aviation industry at €26.3.