Airlines struggling to halt share slide
QANTAS will cut more international flights this month as it grapples with falling demand due to an escalation in the coronavirus outbreak in countries beyond China.
The latest cuts to destinations including Tokyo, Sapporo, Osaka, Hong Kong and Auckland are on top of its grounding the equivalent of 18 planes as it cut international and domestic capacity last month.
“The coronavirus situation and its impact on international travel demand is evolving and we’re monitoring it closely,” the airline said in a statement yesterday.
“Further changes are expected.” Australia has recorded 60 cases of infection and two elderly people have died from the virus.
Globally, the virus has spread to more than 60 countries.
Almost 91,000 have been infected and over 3000 have died, most of them in China.
With the virus spreading rapidly, international tourist bookings to Australia plunged by 56 per cent over the last month, Tourism Minister Simon Birmingham said on radio.
The country also ordered its first school closure after a 16-year-old student tested positive for the novel coronavirus.
Shares in Qantas had fallen 5.03 per cent to a more than two-year low of $4.815 by 1220 AEDT yesterday.
The company has not closed higher on the ASX since February 20 and its share price has shed about 35 per cent since hitting a historic high of $7.46 in December, a $3.94 billion reduction in market capitalisation.
Meanwhile, Qantas’ loss-making domestic rival Virgin Australia Holdings Ltd is holding meetings and calls with debt investors to discuss its recent interim results, a Virgin spokesman said, following a report in The Australian Financial Review there were concerns over falls in its bond prices.
Virgin had no immediate plans to lower capacity beyond domestic and international cuts announced last month but was continuing to monitor demand and would make more adjustments if needed, the spokesman said.
Shares in Virgin Australia are down 40 per cent for the year so far.
Air New Zealand Ltd and Singapore Airlines Ltd this week also announced further capacity cuts than initially planned as the epidemic spreads to more countries.
Air New Zealand’s ASX-listed shares have plunged 30.4 per cent since the start of the year.