The Coronavirus Outbreak

The damage is likely to go well beyond tourism, as business plans are disrupted and consumer confidence is shaken.

Air France KLM planes at Paris Charles de Gaulle Airport. Airlines had already been cutting routes across the Atlantic when President Trump suspended most travel from Europe.
Air France KLM planes at Paris Charles de Gaulle Airport. Airlines had already been cutting routes across the Atlantic when President Trump suspended most travel from Europe.Credit...Joel Saget/Agence France-Presse — Getty Images

President Trump’s abrupt decision to shut America’s borders to most European travelers sowed chaos at the Continent’s airports and at travel-related businesses Thursday, as airlines scrambled to figure out how to halt flights to the United States and governments warned of potentially devastating financial costs.

French Finance Minister Bruno Le Maire spoke of a “massive shock,” and European officials reacted angrily after Mr. Trump late Wednesday announced that he would suspend travel from Europe to the United States for 30 days starting Friday, with the exception of Britain. The State Department warned Americans that they should reconsider all international travel, the most severe caution it can offer short of “do not travel.”

“The coronavirus is a global crisis, not limited to any continent, and it requires cooperation rather than unilateral action,” the European Commission said. “The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation.”

The move hammered shares of European airline and travel stocks as the sector braced for a nearly unprecedented brake on activity. Air France, Lufthansa and IAG, the owner of British Airways and Iberia, fell as much as 13 percent. In early trading in the United States, American Airlines fell about 14 percent, and Delta Air Lines fell 12 about 12 percent.

“The impact will multiply very rapidly in the hours and days to come,” said Roland Héguy, president of the Umih, the French trade association of hotels and restaurants. “Many countries will be hit,” he said, adding that 95 percent of hotels, cafes and restaurants in France were already suffering revenue declines of up to 40 percent because of the coronavirus.

Given how much economic damage has already been done in Europe from the epidemic, some economists said the travel ban, while shocking, would not meaningfully deepen the ongoing downturn — and might even help hasten a recovery.

“Considering all the other restrictions on movement already in place in Europe, in and of itself the ban is not a huge economic event,” said Holger Schmieding, chief economist at Berenberg Bank. “You could even argue that it is a blessing in disguise if it has the effect of slowing the spread in the United States,” he said.

Because the epidemic is a medical emergency, he added, the most important thing governments can do to to ensure economic recovery is to prevent the virus from spreading more widely, even if it inflicts financial pain on companies.

“At the moment, significant short-term economic costs should be incurred if it helps with the medical emergency.” he said. “If it slows the spread of the epidemic to give us enough time to cope, that would be very valuable.”

Nonetheless, the abrupt travel ban threatened a further blow to tourism-dependent industries on both sides of the Atlantic Ocean, and added to the problems of world leaders trying to preserve jobs in the face of the relentless coronavirus outbreak.

European airlines were already grappling with a mounting financial toll after curtailing flights Europe and to Asia. Lufthansa said Wednesday that it would cancel 23,000 flights across the group, a 50 percent reduction.

The European Union, and countries including Italy, Germany and Britain, have pledged over 70 billion euros in aid this week alone to support health systems and prevent an economic domino effect as the coronavirus epidemic puts a chilling effect on businesses and the supply chain.

European officials are especially keen to avoid widespread layoffs at a time when Europe’s economic recovery has showed signs of faltering. They are aiming much of their financial firepower at supporting businesses with schemes to move workers to partial employment to minimize the risk of a spike in unemployment.

That didn’t stop questions from swirling Thursday about the possibility of layoffs. In Rome, Ciampino Airport, a hub for low-cost airlines, announced Thursday that it would shutter entirely as of Friday because of the outbreak. Rome’s Fiumicino Airport, which hosts international flights, is bracing for reduced activity, its operator said.

As passengers at Paris’s Charles de Gaulle airport rushed to book last-minute flights to the United States, Air France said it would decide later Thursday whether to maintain its service to the United States, which represent about a third of revenue. The French government said it was ready to provide state aid — normally forbidden under European Union rules — to help the carrier weather a potentially sharp financial hit.

At the airport, Nadia Hamnache, an employee at SafeBag, a company that sells protective wrap for luggage, said there were already far fewer travelers, with up to 50 percent fewer people visiting shops in Terminal 2E, the hub for Air France and Delta flights. “We’re really afraid of a reduction or canceling of Air France flights, because that impacts us directly,” she said. “If the cancellation of flights continues, we’ll have a loss of revenue.”

Employees were worried that they might be told to stay home, she added. “If we’re still paid, that’s OK, but if they don’t pay us that’s going to be a huge problem,” she said.

European visitors to the United States, excluding those from Britain, totaled nearly 11 million in 2018, accounting for more than a quarter of all travelers. Travel and tourism between the United States and Europe, including areas not covered by the ban, is a business totaling roughly $130 billion annually, according to U.S. data.

Airlines had already been cutting routes across the Atlantic as travelers increasingly chose to stay home. Still, the industry will take an immediate hit.

Air France KLM’s revenue from North American business, which includes destinations outside the United States, totaled $4 billion last year, or about 13 percent of its sales. Lufthansa’s totaled $3.7 billion for the first nine months of last year, or about 15 percent of its sales.

United Airlines and Delta Air Lines both reaped about $7.4 billion from flights over the Atlantic last year, which includes business beyond the countries affected by Mr. Trump’s order. For United, that totaled 17 percent of revenue. For Delta Air Lines, it represents about 15 percent.

Travel agencies and tour operators also scrambled for solutions to withstand the impact.

“It’s absolutely catastrophic,” said Jean-Pierre Mas, president of Entreprises du Voyage, a union representing the main French tour operators.

Mr. Mas said that the United States was the most popular non-European destination for French tourists and business people. Every year about 1.8 million French citizens visit the U.S., with a specific preference for March and April, when about 400,000 French fly to the U.S.

Mr. Mas condemned the “irrational attitude of Trump who thinks that he is protecting his country by barricading it” and said that he was worried such a ban would prompt other countries to follow suit. “This attitude will go viral in the coming days, if not hours,” he said.

Aéroports de Paris, the company that runs the two main international airports in Paris, said it was still planning its response to the ban and could not give specific details about its impact.

“But it’s a catastrophe, for all travel and tourism sectors, for airline companies, for hotels,” said Sonia Gacic, a spokesperson.

Constant Meheut and Eva Mbengue contributed reporting from Paris. Jack Ewing contributed reporting from Frankfurt. Ben Casselman contributed reporting from New York.

  • Updated March 10, 2020

    • What is a coronavirus?
      It is a novel virus named for the crownlike spikes that protrude from its surface. The coronavirus can infect both animals and people and can cause a range of respiratory illnesses from the common cold to lung lesions and pneumonia.
    • How contagious is the virus?
      It seems to spread very easily from person to person, especially in homes, hospitals and other confined spaces. The pathogen can travel through the air, enveloped in tiny respiratory droplets that are produced when a sick person breathes, talks, coughs or sneezes.
    • Where has the virus spread?
      The virus, which originated in Wuhan, China, has sickened more than 127,800 in at least 111 countries and more than 4,700 have died. The spread has slowed in China but is gaining speed in Europe and the United States. World Health Organization officials said the outbreak qualifies as a pandemic.
    • What symptoms should I look out for?
      Symptoms, which can take between two to 14 days to appear, include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Milder cases may resemble the flu or a bad cold, but people may be able to pass on the virus even before they develop symptoms.
    • What if I’m traveling?
      The C.D.C. has advised against all non-essential travel to South Korea, China, Italy and Iran. And the agency has warned older and at-risk travelers to avoid Japan.The State Department has advised Americans against traveling on cruise ships.
    • How long will it take to develop a treatment or vaccine?
      Several drugs are being tested, and some initial findings are expected soon. A vaccine to stop the spread is still at least a year away.