The worst day of trading on the ASX since the global financial crash saw Virgin shares limp to a record low of $0.075 and Qantas drop to $4.15 – down from $7.40 in December.
The chaotic day came as $136.5 billion was wiped off the index’s $1.87 trillion value, as both coronavirus and an oil price war spooked investors.
Previously, Qantas shares plunged 8 per cent on Friday, trading at just $4.68 – close to a three-year low. On Monday, things got much worse as it closed out of the day on just $4.15.
The news came after the airline announced a raft of cuts to its service last week, including reducing flights to Hong Kong, Auckland, Tokyo, Osaka and Sapporo.
Qantas previously said in a statement, “The coronavirus situation and its impact on international travel demand is evolving and we’re monitoring closely. Further changes are expected.”
Virgin shares recovered slightly to 0.080 at the end of Monday, but the airline’s tough day came just a week after its stocks first dipped below 10 cents on 2 March. The week prior, credit rating agency Standard & Poor’s downgraded its outlook to negative.
On Friday, the International Air Transport Association (IATA) said coronavirus could cost the aviation industry four times as much as previously thought.
IATA now estimates the financial impact at $63 billion if the virus is contained within current markets, and $113 billion if it spreads to previously less-affected markets.
Alexandre de Juniac, IATA’s chief executive, said, “The turn of events as a result of COVID-19 is almost without precedent. In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse.
“It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis.”