March 16, 2020 BARRON’S 23
E
arly in the week, global airlines faced three sce-
narios when it came to the coronavirus—bad,
really bad, and reallyreallybad. It took just a
few days—during which the outbreak was
deemed a pandemic, stocks fell further, and sev-
eral countries around the world restricted
travel—to arrive at that reallyreallybad scenario.
And then, on Wednesday, President Trump announced the
30-day ban on foreign citizens traveling to the U.S. from 26
European countries. Analysts, investors, and airline CEOs
are now left wondering just how bad things can get.
The answer? Even worse.
The coronavirus isn’t just a Category 5 hurricane for the
industry. It poses an existential threat. Airlines are fighting
for survival, trying to reassure Wall Street that they can stay
in business even under the most dire of circumstances.
Some, likeDelta Air Lines(ticker: DAL), have the financial
mettle to take off once the health, and economic, recovery
begins. Others, likeNorwegianAir Shuttle(NWARF),
By DAREN FONDA
WhatComesAfterthe
Worst-CaseScenario?
AirlinesBraceforWorse
The airline industry has already blown past some of the pretty bad scenarios analysts had mapped out.
What’s next for the industry could be even worse—but short of disaster. Some airlines could do well.
Dan Page
CRISIS PLAYBOOK