Airline stocks continue to slump
“Carnage continues” among airline stocks as prices fall amid coronavirus fears. FOX Business’ Susan Li and Ashley Webster with more.
As anxiety continues to mount because of the novel coronavirus pandemic, the airline industry, which is canceling flights because of low demand and travel bans, is facing some major roadblocks although it's not as bad as people thought.
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Based on a Shift Research poll surveying 460 people, 19 percent had canceled travel plants because of coronavirus concerns, and 81 percent said they are observing and "have not canceled." Last week, roughly 88 percent of respondents said they "had not canceled" plans and four out of five Americans were still going through with their trips.
Nevertheless, trip cancellations have spiked as the confirmed number of cases rose to above 1,100 on Wednesday. The virus has been confirmed in 37 states and Washington, D.C. And 31 people with the virus have died in the United States, according to the CDC.
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While some travelers are canceling their trips, many are more likely to postpone their trips. Of the 81 percent of Americans with previously booked travel plans are still holding onto their reservations, 29 percent have said they are deferring their plans, according to Skift Research.
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In terms of travel down the line, many Americans are not feeling the need to cancel plans many months in advance. A lot of that has to do with the uncertainty of what will happen as the virus spreads or is contained and they don't want to lose money because of non-refundable policies, which leaves little incentive for travelers to cancel at any time except at the last possible moment.
More trips within the United States are being canceled this week. About 42 percent of the people who canceled plans this week did so for trips within the United States, according to the data. The number of canceled domestic trips increased 18 percent from last week when there was a greater number of international travel plans that were canceled.
But some younger travelers are taking advantage of the pandemic by using the lack of demand to take once in a lifetime trips.
“I feel like if the coronavirus would get even more serious and like wipe out a large amount of people, I might as well be somewhere having fun,” Ashley Henkel a California Central Valley-based college student told NBC News.
Henkel says she will be saving hundreds of dollars on three planned trips to Vancouver, New York City and Portland, Oregon over the next few weeks. Initially, she planned to go this summer but the prices are too expensive.
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There is “no fun in staying at home and being all worried,” she said.
Even though the majority of travelers are maintaining their plans, United Airlines said it will lose money this quarter, and Southwest Airlines CEO Gary Kelly said the outbreak will be more detrimental to the industry than the terrorist attacks of Sept. 11, 2001.
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Global air travel is projected to lose 98 billion Australian dollars ($63.59 billion) to 173 billion Australian dollars ($112.3 billion) because of the drop in demand, according to an estimate from the International Air Transport Association. The coronavirus is on track to slow global travel faster than other pandemics, such as SARS and MERS.
Among all the data, the underlining thing is that 29 percent of all Americans deferring travel due to the virus represent pent-up demand for travel and a growing source of potential energy. If long-term consumer preferences for travel remain the same, then these travelers could become a large pool for travel companies to tap into once public health concerns abate.
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