The coronavirus has far-reaching impacts that extend beyond health, with a wide range of economic effects in sectors ranging from transportation to telecom and retail. We have the latest news on the economic impact of the coronavirus from airlines canceling flights to the delay of the rollout of next-generation 5G networks and merchants reopening stores in China.
Airlines throughout the globe, with the inclusion of three United States carriers that service China, have stopped service to the mainland as well as Hong Kong due to the coronavirus. And airlines have canceled over 200,000 flights as the virus keeps spreading. Air France-KLM stopped China flights and forecasts demand reductions related to the coronavirus to reduce results by up to $217 million, while Qantas warned investors that the virus could probably reduce its earnings in the second hand of the year by $99.5 million.
And, in brick-and-mortar news, Uniqlo operator Fast Retailing has reportedly reopened roughly 100 retail locations in China as of last week. The combination of sometimes trendy products and affordable basics has been a large hit among the increasing middle class in China. But, with an indication that the disruption of the company’s supply chain was starting to affect business away from China, a few spring/summer Uniqlo U collection products have been postponed.
On another note, Moscow is tapping into facial recognition to make sure that those who were told to stay at their houses or in hotels for coronavirus quarantine do so, Reuters reported. Moscow Mayor Sergei Sobyanin said approximately 2,500 individuals who have flown into the city from China have been made to follow a quarantine. He reportedly noted on his website that “compliance with the regime is constantly monitored, including with the help of facial recognition systems and other technical measures.”
The launch of 5G telecom networks has reportedly been delayed by government measures to stem the spread of the coronavirus, Reuters reported. Two of the top fiberoptic cable providers have Wuhan facilities and headquarters. (Wuhan is at the center of the outbreak.) In early February, President Xi Jinping said 5G investment could potentially mitigate the drop in consumer spending due to the virus. China, for its part, has turned 5G into a national priority, with the goal of having countrywide networks and services well ahead of other nations.
And Coca-Cola is predicting that the coronavirus will impact its quarterly earnings by 1 to 2 cents, CNBC reported. The company still foresees meeting its full-year targets even with the hit to its financial results in Q1. China represents roughly 10 percent of its worldwide volume but less of its profit and sales. Coca-Cola foresees that 2020 organic revenue will rise by 5 percent, while adjusted earnings per share will increase to $2.25.
Verizon Communications is not going to the RSA cybersecurity conference because of fears related to the coronavirus, Reuters reported. International Business Machines Corp has also pulled out of the conference because of similar worries. AT&T Cybersecurity also won’t participate, which brings the total number of firms that have withdrawn to 14. The number includes seven from the U.S., six from China and one from Canada.