Getting into China gets more difficult as airlines cancel flights to fight virus spread

January 29, 2020, 11:45 AM UTC

Airlines across the globe suspended more flights to China, as governments clamped down on travel to help stop the spread of the deadly Wuhan virus.

British Airways halted daily routes to Beijing and Shanghai from London’s Heathrow airport, after U.K. officials advised against non-essential travel. The U.K. flag carrier said it would reassess over the next few days.

Hong Kong’s Cathay Pacific Airways Ltd. said separately it would cut capacity to China by 50% or more starting Thursday, while United Airlines Inc. in the U.S. said it would reduce flights to Beijing, Shanghai and Hong Kong.

A woman (L), who recovered after being infected by a new coronavirus, speaks to the press as she walks out of a hospital in Bozhou, in China's eastern Anhui province on January 29, 2020. - A virus similar to the SARS pathogen has claimed 132 lives since emerging in a market in the central Chinese city of Wuhan, and spread around the world. (Photo by STR / AFP) / China OUT (Photo by STR/AFP via Getty Images)
A woman (L), who recovered after being infected by a new coronavirus, speaks to the press as she walks out of a hospital in Bozhou, in China’s eastern Anhui province on January 29, 2020.
STR—AFP via Getty Images

The global airline industry is starting to feel the impact of stepped-up efforts to stop the spread of the virus, which started in the Chinese city of Wuhan. With clusters now cropping up in countries like Germany, airlines have placed other Chinese destinations off limits, and oil traders have dumped contracts for jet fuel in anticipation of an extended slowdown.

Almost 9% of flights scheduled to or from China were scrapped between Jan. 23 and Jan. 27, according to research from Cirium, which analyzes air travel.

The increased alarm has already had an effect within China, after the government imposed restrictions on travel during the Lunar New Year holiday, when millions typically head home to see loved ones. Domestic travel in China fell 7.4% between Jan. 10 and Jan. 28, People’s Daily reported, citing the Ministry of Transport.

Several South Korean carriers have also halted flights to Chinese cities, including Asiana Airlines Inc., Jeju Air Co. and Jin Air Co., while Finnair Oyj, Lion Air in Indonesia, Jetstar Airways’ Singapore operations and Air Macau Co. are among those taking similar steps.

The number of confirmed cases in China soared to 5,974 — overtaking the country’s official count of SARS patients — while 132 people were reported to have died of the coronavirus. Germany said Tuesday it identified a cluster of local patients infected by a woman from Shanghai who had been visiting Europe, a worrying sign as it suggests the potential for additional spread outside China.

Widening Threat

When SARS became a global epidemic, it hit the industry hard initially but the effect was fleeting, said Jozsef Varadi, chief executive officer of Wizz Air Holdings Plc.

“It fell like a stone in the first month but then it started recovering and after four months everything went back to normal,” Varadi said on an earnings conference call Wednesday. “Probably this is going to be a better controlled issue so I wouldn’t expect the same impact as from SARS.”

China Southern Airlines Co. could face the largest blow among the country’s “big three” carriers as it controls 30% of Wuhan’s seat capacity, with routes to and from the capital of Hubei province accounting for 3.6% of its seats, said Bloomberg Intelligence analysts James Teo and Chris Muckensturm. That compares with 1.5% for Air China Ltd., which is also vulnerable, the analysts wrote in a report.

Wuhan’s airport, which was largely closed on Jan. 23, handles about 25 million passengers a year.

Passenger traffic at airlines such as Cathay and China Southern plunged 32% to 37% in the first half of 2003 because of the SARS pandemic, Teo and Muckensturm added. This time, “international airports’ swift implementation of preventative measures can help blunt the impact,” they said.

China Southern shares fell as much as 6.7% as trading resumed in Hong Kong following the Lunar New Year break, while Air China slid 5.5% and China Eastern Airlines Co. dropped as much as 7.7%.

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