Virgin Group founder Richard Branson says the air transport industry has gone through crises in the past but can “stop quickly” amid the risks of coronavirus outbreaks.
The founder of several companies, including air-launch service Virgin Orbit and Virgin Atlantic Airways, received an award from the Royal Aeronautical Society in Washington, D.C., which Branson said was an "interesting" moment because that same day stocks plummeted due to virus concerns.
“I would beg people not to stop flying because the aviation industry can quickly grind to a halt if people don’t have the courage to board planes,” he said on March 9 at the event.
The US government has advised elderly engers to reconsider attending large events or traveling by air, as this age group is more vulnerable to the coronavirus. Branson advised people to “wash your hands, throw the first punch” and take other precautions rather than giving up on air travel.
Since founding Virgin Atlantic Airways and Virgin Cargo in 1984, Branson said his companies have survived lack of demand after the financial crises and terrorist attacks of Sept. "I'm sure we'll survive this."
Travel-related stocks have been particularly hard hit in recent days as governments look to mitigate the spread of the infection. The sharp decline in travel demand is difficult for Branson, who said during his speech “Virgin's core businesses today are airlines, holiday companies, hotels, health clubs, cruise ships”, prompting the businessman to joke: “I wish I had diversified less!”
“All of our industries are on the front lines of this virus”, Branson said of his portfolio of companies.
To encourage people to book flights, Virgin Atlantic announced last week that it will not charge fees to change bookings made before March 4, 2020 to travel during March. Tickets for Virgin's international network and codeshare flights issued between March 4th and March 31st may be changed for travel through September 30th, 2020.
Several companies, including American Airlines, United Airlines and Alaska Airlines, have made similar flexible booking offers as travel options change amid the coronavirus outbreak. Italy is the latest country to face travel restrictions as its government tries to contain the spread of the infection.
The coronavirus is also compounding Virgin Australia's financial woes, which Standard & Poor's downgraded from stable to negative amid lack of demand for flights to China and other Asian countries.
The airline is looking to cut expenses by removing 400 jobs by the end of March and another 350 by June, as well as reconsidering supplier deals and reducing its capacity during the second half of 2020.
“The coronavirus outbreak is significantly impacting the travel industry and we are also seeing weaker domestic and international demand”, Virgin Australia chief executive Paul Scurrah said in a February 25 statement.
