iscover
Qantas shares slumped to just $3.58 on Thursday afternoon – less than half their value three months ago.
The dramatic fall began minutes after US President Donald Trump announced an unprecedented ban of flights from mainland Europe to the US, which had knock-on effects for the aviation industry.
The news, which blindsided major carriers, also caused Virgin Australia shares to bottom out at less than 5 cents. A month ago they were trading at 14 cents.
At midday AEDT, President Trump said the US would ban all flights from mainland Europe for 30 days.
Speaking from the Oval Office, President Trump said the coronavirus restrictions would come into effect from midnight on Friday, but wouldn’t include the UK.
The news came shortly after 23 American states declared a state of emergency, including Washington DC, Arizona, New Mexico, Louisiana and Arkansas.
An hour after the announcement, President Trump appeared to correct himself, by stating that the ban wouldn’t apply to US legal permanent residents, citizens and some of their family members, and also not on cargo.
It was also then announced the ban would only apply to countries in the so-called Schengen Area that have abolished passport and border controls. Those countries are: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.
https://twitter.com/realDonaldTrump/status/1237924658185469954
The latest figures show the disease has now infected 115,800 people, including 1,000 in the US, and killed more than 4,200 worldwide.
Minutes before the address, actor Tom Hanks and his wife Rita Wilson confirmed on Instagram that they had coronavirus, becoming the most high-profile victims of the illness.
Addressing the American public on television, President Trump said, “We will be suspending all travel from Europe to the United States for the next 30 days. The new rules will go into effect Friday at midnight. These restrictions will be adjusted subject to conditions on the ground.”
https://twitter.com/realDonaldTrump/status/1237924069397467137
He said the nation’s “speed and professionalism” meant it was winning the war to combat the virus.
President Trump added, “I’m confident that by counting and continuing to take these tough measures we will significantly reduce the threat to our citizens and we’ll ultimately and expeditiously defeat this virus.
“From the beginning of time, nations and people have faced unforeseen challenges including large scale and very dangerous health threats. This is the way it always was and always will be. It only matters how you respond and we are responding with great speed and professionalism.”
At the close of trading, Qantas finished at $3.64 and Virgin at $0.06. In total, the ASX closed down 7.36%, representing a loss of more than $100 billion.
On Tuesday, Qantas chief executive Alan Joyce announced he would give up his salary for the remainder of the financial year after the larger group announced capacity cuts equivalent to grounding 38 aircraft.
The airline also confirmed rumours that all but two Airbus A380s won’t fly, with eight taken out of service due to reduced demand and two undergoing maintenance.
Qantas said the unprecedented nature of the coronavirus crisis meant it would not issue guidance on earnings for the remainder of FY20.
Joyce said, “We’re in a good position to ride this out, but we need to take steps to maintain this strength. We want to avoid job losses wherever possible. Annual management bonuses have been set to zero and the group executive team will take a significant pay cut.”
Red Cee
says:Decisions like what Trump has just made could send almost every airline bankrupt. No passengers means no income. No income means no airline. Considering many of the world airlines are only just holding on, could send a number to the wall. Morrison needs to be careful not to place either Qantas or Virgin at risk.
Ronald Spencer
says:And if President Trump had not made that decision to try and contain or slow the progress of this disease and the USA had a out of control spread the planes would not be flying as the Pilots and crew would be all off sick
PB
says:The fact is that the virus has spread throughout the world from China by people who traveled by commercial airlines. Shutting down the Australian borders at least prevents further infection from coming in, and simultaneously trying to isolate the virus domestically so that it doesn’t spread, and hope and pray that those who are infected will recover.
I ask you, Red, what you might be saying if your wife, your daughter or son is working in the cabin of a foreign flight with Qantas or Virgin? Would you want them to continue with passengers coughing? Would you take a flight to Asia, Italy or the USA right now? Sit on a plane for 14 hours with potential virus in the cabin? Come on Red – don’t be shy. Let’s hear what you have to say. Don’t be gutless, Red. Readers want to hear from you.
Emirates Airlines has shut down …… Australia and New Zealand have closed their borders. Trump led the way by closing US airspace to fights from suspect countries. However, Trump did NOT close airspace to Australians, so he is NOT responsible for Qantas and Virgin shutting down. Your government chose that, wisely. Air travel from Australia to the United States is not closed. Please get your facts right!
Stu Robertson
says:Excellent response. All leaders are doing what is important. The saving of human life above the value of shares. Travel will return and stock markets will rebound. This blame affixing is pointless and inaccurate. America was right to react to the problem as early as they did. The politicising of the Covid 19 / Chinese Virus /Pandemic via Editorials is truly childish.
Geoff Newberry
says:Like I said Red, not just Trump, and it’s not over yet!
Lucas
says:I very much doubt that this comment will even get published but,
This is a new low guys!
I’ve always been supportive of this magazine but today you have lost my respect.
So it’s Trump now who’s creating this mess is it?
It’s not the virus itself and it’s origins??
Wow! How naive!
Adam Thorn
says:Hi Lucas,
Apologies for the late reply, it’s been busy here as you can imagine. I think this is one of semantics and interpretation. The point was not that Trump was to blame, as such, more in the timing of his announcement. The reason I put the AEDT in is so you can see how the dip came right after he spoke.
Thanks,
Kevin V Russell
says:You know what sent Qantas shares South? That dill Joyce. Thanks for nothing
Ken
says:Fair crack of the whip, Adam; the world has had enough of lefties’ political statements.. This person is blaming the president of a country which is not responsible for the pandemic.
I agree with Lucas completely.
Ani Hart
says:The current situation did come out of China. Regardless – blaming politicians, airlines etc is not going to make our Country and the people be safe. Time to work together to combat this hideous virus/situation – regardless of who or how it is affecting our lives. Lessons to be learnt by everybody so that we are ready for the next attack – if there was to be one.
Dave
says:Hi PB, I agree with you but I don’t think taunting the poster and calling him gutless is appropriate. Now more than ever we need to keep our comments civil and disagree respectfully.
He’s also right, Australia relies on aviation and that will be important post-virus, I hope Morrison does all he can to look after all airlines in Australia, their staff and the great job they do for us.
PB
says:Dave, I am frustrated by people like Red who make cracks at foreigners without cause. Trump, in this case.
Every infected person in Australia of this virus either caught it outside the country and brought it in, or has been infected by someone that brought it in. What America did (led by Trump) in closing travel from infected areas has saved the lives of thousands of people, and Morrison has done the same.
I taunted Red Cee to observe if he would back off his dig at Trump, but he didn’t. I wish he would look at the broad picture, and realise that this virus was a local issue in China that was innocently exported. Countries that closed their borders have spared thousands, if not millions, from infection (although it is spreading rapidly in America).
The airline business is feast and famine – I know because I’ve worked for two of them, and participated in a start up. The airline industry is a classic text book case of a bad business model where the costs are fixed, capital costs are high, one has to employ an army of staff, all of this with no fixed, or predictable revenue stream. The income side is a crap shoot on even a god day, and now the airlines (who have been bleeding us for years with baggage fees, change fees, absurdly tight seating – all to bolster their bottom line) want the taxpayers to bail them out of a slump?
Then along comes Red with his crack about Trump – who has done a great job of arranging pandemic protection – and I’d like him to explain and defend his position. I’d like to hear from him, so I goaded him for a response which he hasn’t made. Should I have called him gutless if he didn’t respond? Well, he hasn’t responded so I’ll leave that to readers to decide.