Cruises, air travel expected to take financial hit from coronavirus

The coronavirus crisis that has engulfed China could sicken one leading cruise line and the air travel industry, companies say.

Cruise operator Carnival Corporation indicated the outbreak — which has killed more than 1,100 people — may cause its earnings to take on water this year, while Boeing officials predicted it would stall the air cargo industry and cut into airline revenues.

The spreading virus forced Carnival to halt cruise operations at Chinese ports and has now started to cause trip cancellations in other parts of Asia, the company said in a Wednesday news release.

The Miami-based travel giant warned its financial performance for the fiscal year could take a hit of 55 to 65 cents per share if it has to suspend all Asian operations through the end of April, though it said it’s not currently planning to take that drastic step.

“The company is currently evaluating contingency plans to mitigate the impact,” Carnival said, adding that it would provide an update on the situation next month.

Boeing — which is already reeling from the grounding of its troubled 737 MAX jet — had expected air freight to increase 1 to 2 percent this year, but it has become “really tough” to see any growth with the industry under pressure, said Randy Tinseth, the vice president of marketing at Boeing’s commercial division.

Boeing has had to delay some deliveries of planes to Chinese airlines amid the coronavirus outbreak, according to Ihssane Mounir, the company’s senior vice president of commercial sales and marketing. He expects airline revenues will suffer because of restrictions on travel to and from China and cuts to Chinese carriers’ capacity.

“China has reduced capacity by 70 percent; that is money, that is revenue,” Mounir told reporters at the Singapore Airshow, which has seen attendance plummet because of fears about the virus.

The coronavirus outbreak has also forced major US airlines such as Delta, American and United to temporarily suspend service to mainland China. Meanwhile, Hong Kong-based Cathay Pacific has asked its 27,000 employees to take three weeks of unpaid leave to help the company grapple with the virus’s financial impact.

Passengers wearing protective masks at Ngurah Rai International Airport in Bali, Indonesia.

EPA

Changi Airport in Singapore

EPA

Ambulances are parked before the Diamond Princess cruise ship at the Daikoku Pier Cruise Terminal in Yokohama, Japan.

EPA

Passengers wearing protective masks at Ngurah Rai International Airport in Bali, Indonesia.

EPA

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With Post wires

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