After the outbreak of coronavirus in China late December 2019, which later declared a pandemic by the World Health Organization (WHO), the world economy has slumped on fears over the outbreak that currently infects over 300,000 people and kills more than 13,000 people.
The business that was among the first sectors to be hit by the outbreak was airline business. At first, travellers started to cancel their flights due to concerns over the outbreak in other countries, but now most of the flights are being cancelled as other countries are on a lockdown in order to contain the virus.
Since the beginning of 2020, the share price of NOK Airlines Public Company Limited (NOK) plunged 56.50% from ฿2.00/share to ฿0.87/share at the closing of March 20, 2020.
Asia Aviation Public Company Limited (AAV) fell 46.42% YTD from ฿2.24/share to ฿1.20/share at the closing of March 20, 2020.
Thai Airways International Public Company Limited (THAI) dropped 55% YTD from ฿6.85/share to ฿3.08/share at the closing of March 20, 2020.
Bangkok Airways Public Company Limited (BA) tumbled 40.71% YTD from ฿6.95/share to ฿4.12/share at the closing of March 20, 2020.
Airports of Thailand Public Company Limited (AOT) shed 27.60% YTD from ฿74.25/share to ฿53.75/share at the closing of March 20, 2020.
Capital Nomura Securities (CNS) has a negative view on aviation businesses while stating that the adjustment in lowering flights to lower the cost amid a slowdown in the business industry, but CNS sees that the impact of the coronavirus outbreak is more severe than it had anticipated.
Earlier, CNS expected a decline of 10% YoY or 4.1 million arrivals in 2020F, but it asserted that the decline could be as high as 28% YoY or 11.3 million arrivals could be lost this year as other travellers in Europe and other regions (exclude China) were greatly affected by the virus outbreak.