The coronavirus will be a test for US airlines that have posted 10 consecutive years of profits.
slashed its service to South Korea, home to the largest outbreak outside of China, to 15 weekly flights from 28. All three major U.S. airlines have suspended flights to mainland China and Hong Kong and waived cancellation and change fees for China and South Korea as demand collapsed.
U.S. airlines, which historically have experienced boom-and-bust cycles, have just posted their 10th consecutive year of profitability, but their future performance will hinge on whether demand declines sharply in the U.S.Some carriers are already preparing for flyers too worried to travel. The last global outbreak of this scale was SARS just under a decade ago, but the fast spread of information could lead travelers to change their plans more quickly now, analysts said.
"We didn't have Facebook and Twitter," said Darryl Genovesi, airline analyst at Vertical Research Partners. The CDC on Wednesday reported the first possible case of "community transmission" of the coronavirus. The Northern California resident had no travel history or contacts that would have put the person at risk, the CDC said. While the number of confirmed cases in the U.S. is still relatively low, some airlines are preparing for passengers to be too scared to travel.
"The risk here for airlines is this triggers a broad slowdown in travel," said Samuel Engel, head of the aviation practice at consulting firm ICF. "Airlines are by their nature diversified enterprises. They can withstand a loss of traffic on a single route or region but where the airlines get hit is when the fear makes people cancel or postpone trips."
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