How Is the Coronavirus Affecting Airlines?
The quarantine of thousands aboard two luxury ships hit by the coronavirus off Japan and Hong Kong escalates a threat to the cruise industry in the middle of what is normally the busiest period for summer vacation bookings.
Authorities said they would hold those aboard for up to two weeks after finding at least 13 infections on the two cruises, turning them into a form of confinement for the more than 7,000 passengers and crew. Carnival Corp.’s Princess Cruise Lines operates the vessel off Yokohama, and Dream Cruises Management Ltd. runs the ship being held off Hong Kong.
Cruise line operators have up to now indicated that the impact of the coronavirus on their business has been limited, even after people were temporarily kept aboard a different Carnival ship in a port near Rome last month when a passenger was suspected of having the virus. Tests showed that was a false alarm.
Companies have stepped up defenses, including altering routes and increasing health checks. Even so, the latest quarantines come at a crucial time for the industry. The period of January through March, known as “wave season,” is historically the peak sales period when the companies entice travelers with early booking incentives.
“Cruise lines appear more at risk from illness because so many people live in close proximity, and adverse publicity may lead to some potential customers postponing booking a cruise” or choosing another type of vacation, said Jamie Rollo, an analyst at Morgan Stanley who covers Carnival and Royal Caribbean Cruises Ltd., in a note to clients. “How this plays out depends on how long the epidemic lasts, and whether the operators have to discount to stimulate demand.”
The cruise industry has some protection from a relatively long booking window of about six months, and customers may be reluctant to cancel existing reservations because they’ll lose their deposits, Rollo said.
On Tuesday, Royal Caribbean Chief Executive Officer Richard Fain said few potential cruisers were asking about the coronavirus, suggesting most consumers were taking the threat in stride. Outside the affected area, the company was seeing little impact, he said.
China accounts for about 5 per cent of the industry’s global revenue, according to Morgan Stanley.
Ten people on the Diamond Princess, which has about 3,700 crew members and passengers aboard, have tested positive for the new coronavirus and been taken to hospitals, Japan’s Health Ministry said. The ship had been moored off Yokohama and moved further out to sea Wednesday, tracking data showed.
A total of 273 people on the Diamond Princess are to be tested. The 10 positive findings were among 31 tests whose results have already come through, the Japanese ministry said. All passengers and crew will be required to stay aboard apart from those who are hospitalized, and passengers will be asked to stay in their rooms.
“Checking the health of the passengers and crew is our priority, while we will also do all possible to prevent any spread of the infection,” Prime Minister Shinzo Abe told parliament. “The remaining passengers and crew will not be allowed to come ashore for the time being.”
A similar number of people are under quarantine aboard the World Dream after three people infected with coronavirus were found to have been passengers, Hong Kong authorities said. The novel coronavirus first emerged in China’s Hubei province weeks ago, and almost 25,000 cases have been reported.
A male Twitter user in his 30s, who says he is a passenger on the Diamond Princess, has been posting photos and videos purported to be from the inside that include an image of health authorities in protective gear walking gold-carpeted hallways.
“It’s so ironic that the schedule is packed with events until the evening,” he said in a tweet Tuesday night, posting a photo of what would have been the agenda for the next day. A Zumba dance-exercise class had been set for 9:30 a.m., along with Japanese language class at 1:45 p.m., bingo at 4:00 p.m., and ballroom dancing at 8:45 p.m.
However, passengers were told to wait in their rooms Wednesday morning, he said in a direct message to Bloomberg, asking to remain anonymous. Breakfast was served to each room by the staff wearing masks, he tweeted.
Checks were conducted on the Diamond Princess after a passenger from Hong Kong who had been on the ship last month tested positive for the virus.
About half the passengers aboard the ship are Japanese and those infected include two customers from Australia, three from Japan, three from Hong Kong, one from the U.S. and a crew member from the Philippines, the operator said.
The infections aboard the ships come as 23 people were, separately, already confirmed to have contracted the disease in Japan.
Princess said its ship would go out to sea before docking at Yokohama to take on provisions. Abe told reporters Wednesday evening that medical personnel will be dispatched to the quarantined liner.
Two cruises that had been scheduled to depart the Japanese city Feb. 4 and 12 have been canceled, Princess said. The company “will continue to fully cooperate with and follow the instructions of global medical authorities and the Japanese government,” according to a statement.
--With assistance from Masaru Aoki, Shoko Oda, Natalie Lung and Richard Weiss.