Aussie travel company shares take a hit amid Coronavirus fears

Qantas and Webjet’s share prices have taken a hit amid growing fears of the scale of the deadly coronavirus.

With news that the death toll from the deadly coronavirus has risen to more than 100, aviation-related companies across Australia – and the world – have seen significant drops in their share prices.

On top of the news the Dow Jones Index fell more than 1.5 per cent in Monday trading, which led to a 1.4 per cent wipe out on the Australian market on Tuesday, the Australian national carrier was among those taking a hit to their bottom line.

Qantas shares had fallen by 5.2 per cent to $6.36 at close of trading on Tuesday, with a 6.3 per cent drop over the five-day period.

Webjet shares were down by 13.9 per cent to $12.37 at closing, with a 9.64 per cent drop in share price over the five-day period. Webjet’s observed drop in share price also came after a rating downgrade from Morgan Stanley, in which analysts slashed the price target on the company’s shares by almost 20 per cent to $10.00

Additionally, Australia and New Zealand’s airports have taken a hit.

Sydney Airport’s shares saw a drop of 3.32 per cent to $8.15 on Tuesday, while Auckland International Airport’s share price dropped to 3.71 per cent and $8.29.

The Kiwi national carrier, Air New Zealand, took a hit with its share price closing at $2.79, with an observed drop of 3.12 per cent, on Tuesday.

United States stocks did, however, bounce back with a 0.7 per cent increase at Tuesday close of trade, following fears of the impact of the coronavirus outbreak on global economic growth after Monday’s sharp fall, which analysts described as the biggest one-day selloff since early October.

Coronavirus could land a multi-billion-dollar blow to the Australian economy

The number of known cases of the new virus have risen by nearly 60 percent overnight. While a shortage of test kits has led experts to warn that the real number may be higher, The New York Times report.

Research by PricewaterhouseCoopers (PwC) indicates Australia’s GDP could fall by as much as $2.3 billion if the $9.2 billion spent per year by Chinese tourists and students declined.

In a note to clients obtained by multiple outlets, financial analysts at UBS forecasted a 3 per cent decline in international traffic “if the coronavirus spreads”.

UBS has also reportedly reduced its earnings per share estimates for Qantas by 4–5 per cent from the 2021 financial year to account for “an expected decline in travel related to the Australian bushfires and the recent outbreak of the coronavirus in China”.

Qantas has declined to comment on the note or its share price ahead of the airline’s half-year results announcement, which will occur on 20 February.

Coronavirus breakthrough

Chinese authorities on Tuesday said coronavirus is rapidly spreading, as the official death count of known cases increased by nearly 60 per cent overnight, with 106 people killed by the virus.

The previous death toll on Monday was 81. While the number of confirmed cases increased to 4,515 on Tuesday – up from 2,835 on Monday – according to the National Health Commission. Australia has reported five known cases of coronavirus.

A breakthrough in the global fight against the virus, however, could help scientists in the fight to develop a vaccine.

Australian scientists have developed a lab-grown version of the disease they described as a “game changer”, ABC News reported, which will now be shared with the World Health Organisation (WHO) in Europe. This in turn will be shared with labs worldwide.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

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