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Industry faces ‘rocky


‘Leisure demand dip is short term’


Ian Taylor


Leading airline bosses confirmed a downturn in leisure demand since the coronavirus outbreak in Italy last week but insisted they expect it to be “temporary”. Ryanair chief executive Michael


O’Leary said: “There is a reduction in leisure demand, but it is short term. We see no diminution in demand or cancellations for Easter at this point. May could be soft, but I expect the panic to reduce after that and demand return – stimulated by a lot of deals.” Speaking at an Airlines for Europe


summit in Brussels, O’Leary insisted: “There is a lot of misinformation. The next couple of weeks will be soft, but it will settle down over Easter, unless something more happens. We’ve been through Sars and 9/11. The media panic about travel is short term.” International Airlines Group chief


executive Willie Walsh agreed the situation would stabilise, but warned demand could initially stabilise at a lower level. He said: “It’s too early to say what the impact will be. I don’t see any similarity to 9/11. That saw a very significant impact on demand on the North Atlantic, but it recovered


IAG’s Willie Walsh says ‘the coronavirus situation is much more dynamic than 9/11’


There is a lot of


misinformation. We’ve been through Sars and 9/11. The media panic is short term


quickly. The situation with the coronavirus is much more dynamic. “We saw a significant reduction in


demand in Asia. Demand stabilised until the announcement on Italy. If the situation follows the pattern in Asia we would expect it to stabilise in a couple of weeks.” Walsh confirmed “a fall in demand


from business channels as a result of more-restrictive travel policies as well as cancellation of large events”, but said: “I have no doubt traffic will recover.” Air France-KLM chief executive


Benjamin Smith agreed: “I wouldn’t use 9/11 as a reference point. Sars could be, but the difference is the type of media attention this is getting. Once there is a better understanding, we should see a rebound.” He said the crisis “will accelerate consolidation” among airlines, adding: “There are a lot of weak carriers in the world.”


Miles Morgan appears on BBC News Special about coronavirus and the impact on travel


Trade reports b


Travel Weekly reporters


The next six weeks could make or break the industry’s performance this summer as the spread of the coronavirus in Europe has seen demand take a “significant” hit. Operators and agencies this week


reported an abrupt slowdown in bookings and said customers were choosing to delay holidays. Miles Morgan Travel chairman


Miles Morgan said forward bookings were “noticeably down” and added: “The impact on cashflow will start to hit businesses in the next six weeks, with summer balances coming in 12 weeks before departure. That’s when people will make a decision on whether to walk away from their deposit so the situation will crystallise.” The death toll from the virus


stood at 3,131 globally on Tuesday, with 2,835 in China. Northern Italy was the worst-


affected region in Europe, with more than 2,000 cases and 52 deaths. Airlines cancelled hundreds of


flights, with BA, easyJet and Ryanair 4 5 MARCH 2020 People just stopped


booking. There is a nervousness about the implications. If this goes on it could be disastrous


reporting a downturn in demand and no-shows at airports. Tui reported “weaker bookings” in the past week and said it was “reviewing” capacity. Trade shows, including the world’s


largest, ITB Berlin, were cancelled. John Hays, managing director


of Hays Travel, said: “We could potentially be facing a major challenge.” Alistair Rowland, chief retail


officer for specialist business at The Midcounties Co-operative, noted a “significant” short-term impact, with a 20% drop in booking volumes last week. He said: “March is going to be rocky for the trade.” Alan Bowen, advisor to the


Association of Atol Companies, said the confirmation of six cases at the H10 Costa Adeje Palace hotel


travelweekly.co.uk


PICTURE: Shutterstock


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