Recorded as the worst since the financial crisis of 2008, last week global stock markets plummeted to record lows not seen for more than a decade. As Coronavirus spreads and new cases are reported in places far-flung from the original outbreak in Wuhan, China, fears of a pandemic loom large. Meanwhile, the global economy has started to show major signs of being another victim of the Coronavirus. So far, airlines and travel companies have borne the brunt of the latest financial chaos, with news of the spread of the deadly virus triggering widespread panic-selling.
Bosses of British Airways’ parent company IAG have warned that the deadly Coronavirus outbreak could push airlines who are already struggling “over the edge.” Alongside the signalling of alarm at IAG, Easyjet also confirmed a massive drop in demand for flights in and out of Italy. Also, Finnair warned profits were in jeopardy due to the spread of the virus, while United Airlines halted all services to Japan and South Korea. Furthermore, the government of Saudia Arabia also announced a closure of pilgrimages to Mecca, in order to help contain the spread of the virus. The impact of the virus has thus steadily resonated across the global economy.
As markets closed for the weekend on Friday, total losses resulting from the spread of Coronavirus were estimated at £4.6 trillion. Airlines and travel companies have been the hardest hit so far, with industry leaders reporting staggering losses. IAG, which owns British Airways, Iberia, Vueling and Aer Lingues, lost almost a quarter of its value which equates to around £3 billion. While the values of IAG’s shares fell by around 8.4%. Other companies affected by what seems to be a growing crisis include Tui whose value has fallen by 30%, Easyjet which has lost 27% and Ryanair which fell by 20%.