Mar 13, 2020 - Health

The coronavirus is taking a huge toll on the travel industry

Illustration: Aïda Amer/Axios

The world is hunkering down and staying home, which is sending the travel industry — and the rest of the economy — into a tailspin.

Why it matters: A freedom we usually take for granted — the ability to go anywhere, anytime — is taking a back seat to public health concerns as officials try to slow the spread of the coronavirus. The interruption of travel has far-reaching economic consequences, especially for the 15.7 million Americans whose jobs depend on travel.

What's happening: Starting today, the U.S. is banning travel from most European countries, except for Americans who undergo screening when they return.

The latest restrictions are sure to hurt the airline industry, already suffering from a plunge in bookings not seen since the aftermath of 9/11.

  • Budget airline Norwegian Air said Thursday it would cancel 4,000 flights and temporarily lay off about half of its staff because of the coronavirus outbreak.
  • British airline Flybe collapsed a week ago, while British Airways suspended service to New York's JFK Airport, one of its most lucrative routes.
  • United Airlines and others have also been cutting routes, and offering voluntary furloughs to employees.

The economic fallout will be widespread, according to the International Air Transport Association, which just a week ago warned the crisis could wipe out some $113 billion of airline revenue.

  • Last year, 46 million passengers flew on roughly 200,000 flights between the U.S. and the 26 affected European countries, says IATA.
  • In March 2019, international visitors arriving from Europe (excluding the U.K.) accounted for about 29% of total overseas arrivals to the U.S., according to the U.S. Travel Association.
  • Those visitors spent approximately $3.4 billion in the U.S., the group said.

There are unintended consequences for air freight, too.

  • The restrictions are meant to apply only to people, not cargo, the White House said, correcting an early misstatement in the president's TV address to the nation.
  • But more than 60% of the airfreight that moves between Europe and the U.S. travels on passenger flights.
  • Suspending those flights could snarl trans-Atlantic commerce, notes the Wall Street Journal.
  • Everything from electronics to auto parts, pharmaceuticals and medical supplies are transported in the belly of passenger planes.

The $150 billion cruise industry is also suffering due to the rapid spread of COVID-19.

  • Princess Cruises and Viking canceled all voyages for the next two months after ships became hot spots for coronavirus outbreaks.
  • The U.S. State Department warned that “U.S. citizens, particularly travelers with underlying health conditions, should not travel by cruise ship.”

The bottom line: As long as the coronavirus is running rampant, the economic effects will continue to mount.

Go deeper

Updated 33 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 8 a.m. ET: 5,945,737— Total deaths: 365,368 — Total recoveries — 2,515,675Map.
  2. U.S.: Total confirmed cases as of 8 a.m. ET: 1,747,087 — Total deaths: 102,836 — Total recoveries: 406,446 — Total tested: 16,099,515Map.
  3. Supreme Court: Chief Justice Roberts sides with liberals in denying challenge to California's pandemic worship rules.
  4. Public health: Hydroxychloroquine prescription fills exploded in March.
  5. 2020: North Carolina asks RNC if convention will honor Trump's wish for no masks or social distancing.
  6. Business: Fed chair Powell says coronavirus is "great increaser" of income inequality.

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