As virus toll rises, airline losses soar with China flight cuts

US airlines extended flight cancellations to China until April as demand for air travel plunges over virus fears.

Vietnam Airlines said the coronavirus outbreak has significantly reduced international and domestic travel demand in the Vietnam network [File: Kham/Reuters]
Vietnam Airlines said the coronavirus outbreak has significantly reduced international and domestic travel demand in the Vietnam network [File: Kham/Reuters]

Vietnam Airlines said on Thursday it was losing up to 250 billion Vietnamese dong ($10.8m) a week in revenue due to travel curbs resulting from the coronavirus outbreak.

The country’s flag carrier is reducing operations and trying to cut costs to ride out the negative effects of the epidemic and “achieve a positive financial result” for this year, it said in an emailed statement.

It has suspended all flights to and from mainland China since the end of January, directly affecting 70,000 visitors per month between the two countries, it said.

“The epidemic has significantly reduced the travel demand of domestic and international tourists in the Vietnam network,” the company said, adding that its passengers on domestic routes have also fallen by 20-30 percent over the past two weeks.

China, where the coronavirus epidemic has killed more than 1,300 people, is Vietnam’s largest source of foreign tourists and biggest trading partner. Chinese tourists accounted for one-third of the 18 million foreign tourists visiting Vietnam last year.

Vietnam Airlines’ pre-tax profit rose 1.72 percent last year to $145.4m.

The government said on Wednesday the virus has cost Vietnamese airlines about 10 trillion dong ($429m) so far in lost revenues.

Many airlines globally haves suspended flights to China as countries impose travel bans or quarantines for people arriving from China.

United Airlines said late on Wednesday it will extend cancellations of all United States flights to China through to late April due to the coronavirus epidemic.

With the announcement by Chicago-based United, all US passenger carriers flying to China have now cancelled flights into late April. Carriers say part of the reason is a dramatic drop-off in demand.

United said it was extending cancellations of flights to Hong Kong, which had been set to resume on February 21, and for flights to mainland China, that had been set to resume on March 28. Flights will resume starting April 24.

United normally operates roughly 12 flights a day from the US to mainland China and Hong Kong.

American Airlines Group Inc, the largest US carrier, said on Tuesday it was extending the suspension of its China and Hong Kong flights through April 24, amid reduced demand due to the coronavirus outbreak. The carrier had earlier suspended its China and Hong Kong flights until March 27.

The US government has placed new restrictions on travellers to the US who have visited China, barring nearly all non-US residents if they have been in China within the last 14 days.

The US is also limiting flights from China or other international flights with US passengers that have been to China within the previous 14 days to 11 major US airports for enhanced screening. It requires a quarantine of US citizens who have recently visited Hubei province in China.

Delta Air Lines Inc previously suspended flights to China through April 30.

On Wednesday, the Mobile World Congress, an annual telecoms industry gathering that draws more than 100,000 visitors to Barcelona, was cancelled after a mass exodus by exhibitors due to coronavirus-related concerns. 

Source: Reuters

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