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United Slashes Asia Service as Airlines Struggle With Virus Impact

United Airlines slashed its Asia service on Friday as it and other U.S. and European airlines continue to cope with the impact of the coronavirus outbreak.

United Airlines  (UAL) - Get Free Report on Friday announced that it is slashing service among a wide swath of its Asia routes as the spread of the coronavirus continues to drive down demand - adding to airlines' woes over how the outbreak will impact future earnings. 

Shares of United, Delta Air Lines  (DAL) - Get Free Report and American Airlines  (AAL) - Get Free Report were all lower on Friday after British Airways and Iberian Airways parent IAG and European budget carrier EasyJet both said earnings would be “adversely affected” by the outbreak.

In morning trading, United stock was down 1.25% at $64.13, Delta was down 2.57% at $46.95 and American was down 3.06% at $19.97.

United took an additional hit after announcing that it will be cutting back a significant portion of its U.S.-to-Asia routes amid a large drop-off in passenger traffic. United has the most routes to Asia.

Meantime, IAG said it expects capacity to be hit by 1% to 2% amid canceled flights and slower bookings. The company has suspended all flights to mainland China and cut others across Asia. In Italy, IAG said capacity had been significantly reduced for the coming month.

EasyJet, meanwhile, said it had seen a significant softening in demand from northern Italy and other European countries. It also warned it plans to cancel a number of flights out of Italy, though noted it is too early to quantify the impact on its results.

While United, Delta and American - the airlines with the most flights to China and other international destinations - have already seen their shares walloped amid hundreds of canceled flights and a big drop in passenger traffic, the European warnings prompted another wave of selling as investors try to price in additional revenue declines.

Domestic carriers were also under pressure on Friday as investors brace for a general drop-off in passenger travel in the continental United States.

Shares of Alaska Airlines  (ALK) - Get Free Report were down 2.3% at $51.75, shares of Southwest Airlines  (LUV) - Get Free Report were down 1.29% at $46.03, shares of JetBlue (JBLU) - Get Free Report were down 2.7% at $15.83 and shares of Spirit  (SAVE) - Get Free Report were down 2.96% at $28.87.