The coronavirus has had a dramatic effect on the global economy, with markets worldwide suffering losses. The Dow Jones closed down 970 points on Thursday, or 3.6%, marking its fifth-worst single-day point drop on record. The index was down nearly 1,148 points at its lowest point.
This roller coaster of a week saw the Dow post two of its best days in history in terms of points gained on Monday and Wednesday, and one of its worst point losses Tuesday.
The Fed shocked Wall Street Tuesday with an emergency rate cut to give businesses and households a boost, amid concerns that if coronavirus keeps people at home, consumer spending could fall. Travel and leisure companies are being hit hard. One executive in the aviation industry called the virus a “gut punch.”
“This isn’t economic in the sense that people want to travel but they can’t afford to,” said Gary Kelly, the CEO of Southwest Airlines. “We could discount prices tomorrow and it wouldn’t do any good.”
International carriers are taking a similar hit The outbreak could cost the airline industry as much as $113 billion in lost revenue, according to the International Air Transport Association (IATA).
While there were no predictions about how long the aviation world will be impacted, Alaska Airlines CEO Brad Tilden said the “booking softness” is linked to substantial passenger “anxiety” — a phenomenon the airline trade association in the US said may not be grounded in the actual risks to passengers.”We’re getting to the point where the reaction to the virus may be worse than the virus itself,” said Nicholas Calio of Airlines for America.