The fear of flying caused by the coronavirus outbreak is reminiscent of 9/11, Southwest Airlines CEO Gary Kelly told CNBC on Thursday.
“9/11 wasn’t an economically driven issue for travel. It was more fear, quite frankly, and I think that that’s really what’s manifested this time,” Kelly said on “The Exchange.”
He said the lack of travel demand as the coronavirus spreads across the U.S. is also similar to past economic recessions.
Kelly noted the travel restrictions put in place by many companies and said it’s tough to determine how much of the lost bookings were going to be business or personal flights.
“So I think there are elements of both, but it has a 9/11-like feel. Hopefully we’ll get this behind us very quickly,” he said.
Southwest began to experience “very sharp declines” in bookings last week, in the range of “several hundred million dollars we think,” he said. “We’re guessing. It’s still early March.”
“It was a very noticeable, precipitous decline. It’s continued on a daily basis,” Kelly said.
Southwest said its revenue per available seat mile — a key industry measure of how much money airlines make for each seat they fly per mile — may range from a 2% decline to a 1% increase on the year this quarter. It previously estimated a 3.5% to 5.5% increase.
Shares of Dallas-based Southwest hit a new 52-week low Thursday, sliding 3.6% to $45.25. Less than a month ago, on Feb. 14, Southwest was at a 52-week high of $58.83 per share.
Other airlines have taken a hit, too. American Airlines on Thursday dropped 13.4% to $16.04, where it now sits down 44% year to date. And United Airlines, which recently announced April service cuts and a temporary hiring freeze in response to lost demand, fell 13.3% to $51.59. United is also down more than 40% year to date.
If the coronavirus continues to spread, airlines across the globe could see up to $113 billion in lost revenue this year, the most since the financial crisis, according to an estimate Thursday from the International Air Transport Association, an industry trade group.
— CNBC’s Leslie Josephs contributed to this report.