[ET Net News Agency, 13 March 2020] The spread of COVID-19 cases across the globe has
caused air traffic demand to plunge in recent weeks. With COVID-19 now present in more
than 100 countries and territories, flight cancellations are accelerating and bookings are
drastically declining as consumers delay or cancel trips, corporate travel policies are
more heavily restricted, and major events are canceled around the world.
According to S&P's report "Coronavirus' Global Spread Poses More Serious Challenges For
Airlines," the ultimate impact of the coronavirus outbreak on our global airline ratings
will depend on the duration and severity of the crisis, and the type and severity of
measures airlines and governments take to mitigate it. These decisions will be partly
informed by global, national, and local health authorities' advice on travel to highly
affected areas.
Yesterday President Trump announced new travel restrictions preventing anyone who has
been in the Schengen Area of Europe in the prior 14-day period from entering the U.S.
Travel restrictions across Italy have already driven many airlines to temporarily suspend
flight schedules to, from, and within the country, and there is a risk that other
countries will need to implement similar restrictions over time.
The agency sees significant downside potential to the International Air Transport
Assn.'s 19% global "extensive spread" revenue loss projection, given the recent, rapid
spread of the virus in the U.S. and President Trump's announced 30-day ban on travel to
the U.S. from most of Europe.
All airlines will need to make material adjustments to their capacity and operating cost
bases in response to what may or may not be a short-term crisis but is sure to have a
lasting impact on air travel throughout 2020.
Over the next several weeks we will conduct reviews on global airline companies to
reflect our updated views on the industry and this highly uncertain and fast-moving
situation. (KL)