More than 92,300 people have been infected by the virus, which has killed about 3,100 people. Many of the cases are in China, but recent cases ex-China have been surging, especially in South Korea, Iran, Italy, Japan, and in many other countries across Europe.
Airlines have spent the last month canceling flights to China – American Airlines, United Airlines, and Delta Air Lines have suspended service to mainland China and Hong Kong. Reuters provides a full list of canceled flights across the world.
Flights to and from China crashed 80% YoY in February, according to Cirium travel industry data. Global air travel has plunged for the first time since the 2008/09 financial crisis, mostly in the Asia-Pacific region, the International Air Transport Association (IATA) recently said.
Plunging air traffic across the world has resulted in a steep decline in jet fuel. Singapore jet fuel prices have fallen 30% since the start of 2020 and contributed to a 50% collapse in jet fuel crack spreads, now at 2009 lows, Refinitiv data shows.
"The coronavirus outbreak has hampered jet fuel demand in Asia and the impact is expected to linger for a few more months," said Sri Paravaikkarasu, director for Asia oil at consultancy FGE.
"It's indeed an unprecedented fall since the global financial crisis... Jet fuel cracks have fallen to about $8 per barrel and we think it will stabilize around these levels in the next few months before seeing a recovery in the third quarter," Paravaikkarasu said.
Jet fuel demand will likely remain in a slump for the next several quarters because virus fears will drive a plunge in tourism around the world, eliminate the need for air travel demand as long as the virus spreads. This could suggest the airline industry is headed for turbulence.
"We do see the virus eroding jet fuel demand to some extent in the Western Hemisphere. If the demand erosion develops faster, East-West flows will come under pressure," Paravaikkarasu said.
Sukrit Vijayakar, director of Indian energy consultancy Trifecta, said people tend to plan their vacations far in advance. This could mean air travel remains depressed for the first half of the year.
The air travel slump suggests immense pain is headed for the global travel and tourism industry, employs roughly 320 million jobs across the world; Restaurants, travel agencies, hotels, amusement parks, casinos, and shopping malls, could be the most heavily impacted businesses to experience job losses if the virus crisis persists.