Airlines Brought To Their Knees By Coronavirus: What's Ahead?
Zacks Investment Research | Mar 15, 2020 11:40PM ET
The dreaded coronavirus disease (COVID-19), which was declared a pandemic by the World Health Organization on Mar 11, has been a nightmare for stocks, keeping investors on the edge.
Due to his health hazard, which has claimed multiple lives apart from infecting many more across the globe, the S&P 500, Nasdaq and the Dow Jones plunged to their historic lows on Mar 12, resulting in the end of the 11-year bull run.
Due to coronavirus woes, the S&P 500, Nasdaq and the Dow Jones have tanked 16.1%, 12.2% and 18.8%, respectively, so far this year, paring last year’s impressive gains.
Jolted Airlines Take Actions to Meet Dwindling Demand
Even though coronavirus-related fears have rattled most sectors, travel-focused stocks, which include airlines, have borne the brunt of the outbreak. Evidently, the Zacks
Airline companies based in the United States too have resorted to various measures for tackling the coronavirus-led sharp drop in demand. Evidently, Delta Air Lines (NYSE:DAL) will slash overall capacity by 40% in the next few months, the highest in its history, including 2001, as air travel demand sees a rapid fall and revenues take a hit. Moreover, American Airlines (NASDAQ:AAL) aims to cut international flights by 75% to match the extremely-low demand scenario. United Airlines (NASDAQ:UAL) aims to trim capacity by almost 50% in April and May.
Also, to combat the drop in demand, airlines are reducing capital expenses, discretionary operating costs as well as suspending share buybacks.
More Turbulence Down the Road?
Even though the 30-day ban on travel to the United States from Zacks Investment Research
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