India bans all travel into country, in ‘an extreme’ move by country to stop Covid-19
Airlines and Staff suffer huge losses
Global stocks plunge to new lows despite emergency interventions
The decision by the World Health Organisation (WHO) to use the word Pandemic for the first time on Wednesday, justified by the rate of spread of the Coronavirus and the associated mortality have compounded the threat of the disease, to a scale not seen in living memories of many people resulting into panic and anxiety.
As governments across major industrialized countries adopt severe travel and movement restrictions, not only is trade is being affected, industries are closing, airlines are grounding aircraft and panic and confusion about what lies ahead is spreading. These have adversely and severely affected businesses world wide, beyond what even the top policy makers imagined.
The Dow Jones Industrial Average, or simply the Dow, which measures the stock performance of 30 large companies listed on stock exchanges in the United States, fell by 10% on Thursday, its worst performance since 1987. The S&P 500 500 which measures the performance of 500 large companies listed on stock exchanges in the United States also fell by 9%.
The sudden slump comes in the wake of last Friday’s sudden fall in global stocks that was largely associated with the feud between Saudi Arabia and Russia over oil outputs. Now instability has re-emerged and is shaking the financial sector, despite a record stimulus package that was announced by the US federal reserve.
Airlines cut staff, flights and some collapse
Before US President Donald Trump announced a 30-day travel ban from 26 European countries to the US on Thursday, some airlines were already feeling the pinch of the Coronavirus.
The BBC reported last week that British-owned Europe’s biggest regional airline Flybe went into administration because of the financial pressures brought about by the Coronavirus.
Elsewhere, airlines are recording massive turbulences similar to those experienced during flights only that this time, they are happening on the ground in the form of disappearing customers due to travel restrictions.
The US’s biggest airline United, has reported a 70% cancellation of bookings from customers on Thursday.
Other airlines are grounding fleet and asking staff to take unpaid leave. CathyPacific, Hongkong’s largest carrier asked 25000 staff to stay home on unpaid leave. So did Emirates, Lufthansa, and several other airlines ask staff to stay home.
An unprecedented attack
American news channel CBSnews reported that despite the US’s central bank emergency market intervention last week, markets have continued to plunge.
The network reported that:
When the Federal Reserve cuts interest rates, the stock market usually goes up. But the novel coronavirus appears to have contaminated the rules on Wall Street along with much of the planet.
The Fed on Tuesday lowered its short-term interest rates by 0.5 percentage points in an emergency move aimed at protecting the economy against the disease known as COVID-19. That was the biggest single cut in the Fed’s benchmark interest rate since October 2008 at the start of the financial crisis.
And yet, the market plunged.