Airlines could take a major hit from coronavirus but passengers could see big savings
In the wake of the World Health Organization’s declaration of a coronavirus international emergency, airlines are preparing for financial losses due to flight cancellations and lower ridership.
For intrepid travelers, however, the potential crisis could mean major savings on ticket purchases. Major carriers have already lowered prices by an average of 25 percent on flights between Europe and the U.S. to major Asian hubs and further discounts can be expected. “Although it’s still early in the epidemic cycle, but airlines are already seeing a reduction of 15 to 50 percent in passenger counts to cities like Sinagpore, Tokyo, Manila and Sydney and even great losses to Hong Kong on flights that have not been cancelled,” says airline analyst Ken Herbert. “The hard thing for airlines is not knowing how to plan for this since they have no idea at this point the extent of the infection.”
On the flights still connecting New York and Hong Hong, Friday prices had dropped to less than $200 on three airlines. In Ecuador, American Airline has reduced the fare for its Quito to Miami flight from $543 to $381 within the last week. Other carriers in Latin America have also announced lower fares in hopes of maintaining passenger loads.
Herbert says that past outbreaks provide some idea of what the next weeks and months might bring for the airlines. “In the three other major epidemics since 2000 the average revenue drop was 13% but some airlines operating in the most affected markets sustained drops of more than 50 percent.”