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Southwest Airlines coronavirus warning spooks Wall St.

Video credit: Reuters - Politics
Published on March 5, 2020 - Duration: 02:27s

Southwest Airlines coronavirus warning spooks Wall St.

Shares of airlines and cruise ship operators were sharply lower on Thursday after Southwest Airlines warned bookings are down because of coronavirus fears and a cruise ship with sick passengers was not allowed to dock in California.

Conway G.

Gittens has the details.

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Southwest Airlines coronavirus warning spooks Wall St.

Southwest Airlines on Thursday became the latest travel company to warn sales will take a hit due to the coronavirus outbreak.

The domestic carrier cut its first-quarter sales outlook after seeing a significant jump in ticket cancellations and declining traffic.

The sales warning pushed shares of Southwest Airlines to their lowest level since the fall of 2016.

From Southwest - to larger international peers such as United - airlines are slashing fares and canceling change-ticket fees to offset weakening demand, but investors are still worried.

For example, shares of American Airlines have plunged 41 percent year to date.

And the worries extend far beyond just leisure travel.

Many businesses have stopped all non-essential trips, told employees to work from home, conferences have been canceled and even the International Monetary Fund and World Bank transformed their upcoming annual global meeting in D.C.

Into a virtual one.

That all means fewer business travelers and that's bad news for the industry, says Atmosphere Research Group's Henry Harteveldt.

LONDON, UNITED KINGDOM (MARCH 4, 2020) (REUTERS VIA SKYPE) (SOUNDBITE) (English) SAN FRANCISCO, CALIFORNIA-BASED, ATMOSPHERE RESEARCH GROUP, TRAVEL INDUSTRY ANALYST AND ADVISOR, HENRY HARTEVELDT, SAYING: "On a long haul flight, a business class passenger is five times more profitable than someone in economy.

So, losing business travelers, whether they are U.S. domestic or regional, flying within Europe or within Asia, or long-haul, is going to have a significantly negative impact on airlines." Worried over how much the coronavirus outbreak could damage their business, leaders from the airline industry went to the White House on Wednesday... SOUNDBITE (MARCH 04, 2020) (ENGLISH) PRESIDENT DONALD TRUMP, SAYING: "These people are flying.

It is safe to fly.

In large portions of the world it is very safe to fly." ...where they agreed to step up coronavirus testing of passengers flying from Italy, China, Iran, South Korea and Japan.

But the damage from the coronavirus outbreak isn't limited to airlines.

Cruise ship operators are among the worst hit by the epidemic.

And now a ship owned by Carnival has been barred from docking in California after at least 20 people fell ill.

Shares of major cruise operators: Norwegian, Carnival, and Royal Caribbean have all lost nearly 50 percent of their value since the outbreak began.

Vice President Mike Pence, who is leading America's coronavirus-fighting efforts, plans to meet with cruise operators on Saturday.

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