U.S. airlines have started to allow people to change the dates of flights they have booked to and from China, at no charge. China’s own carriers have seen a collapse in traffic. In some cases, local carriers have cut the number of flights or are not flying at all. As the coronavirus spreads, and the number of people on flights plunges, will airlines, particularly U.S. airlines, stop flying or will they keep their schedules and fly nearly deserted planes?
Carriers face a crossroads. People, and at some point perhaps intrepid people, will expect airlines to keep their schedules. This will be particularly true of flights inside the United States. However, if the coronavirus starts to spread here, it will be impossible to say that planes are safe. The virus can have a gestation period of two weeks. During that time, some people will not show any symptoms. Travelers will not know if their flights may be dangerous.
The airline problem is just the tip of an iceberg that could include industries as broad as fast food to automotive sales. In no period in recent history were Americans were afraid to congregate in public places. Some estimates say that the new coronavirus could spread to as many as 100,000 people in China. At that point, the odds skyrocket that it spreads broadly around the world.
American companies already have started to suffer the effects of the virus on their businesses in China. McDonald’s and Starbucks have shuttered stores, for example. Small numbers of people in most Asian counties have been infected. Maps of the world, posted by major media, show a spread to Europe, Australia, Canada and the United States. The count of people who have the virus is tiny in most Western nations, for now.
At what point will American companies suffer sales dips of their businesses at home? Perhaps never. Yet, it may only take a few hundred cases for a measure of prudence to smother short-term performance, whether that is among airlines or a much broader portion of the American economy.
24/7 Wall St.
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