Airline bookings have 'fallen off a cliff' not seen since 9/11 as coronavirus wreaks havoc on the industry

• Airline bookings have fallen drastically as travelers cancel flights over fear of the spreading coronavirus
• Some carrier's stock prices have fallen more than 50% in recent months as demand wanes.
• Analysts at Cowen estimate the industry could see its worst headwinds since September 2001.
• Visit Business Insider's homepage for more stories.

Airlines have drastically cut flights as demand for travel waned amid the spreading coronavirus, and the worst has likely yet to come.

Shares the major US carriers have fallen by more than 50% in some cases since January as bookings are culled, leaving the airlines in a cash crunch, according to analysts at Cowen. Things were exacerbated by a new travel ban on most European countries by President Donald Trump on Wednesday evening.

"Airline bookings have fallen off a cliff, with cancellations exceeding new bookings as travelers are afraid to fly," Cowen said in a note to clients on Thursday.

"We think the fear is more about whether or not they will get home from their vacation than the actual trip. No one wants to wind up in quarantine for 2 weeks anywhere as a result of someone getting sick at a resort. As a result, we expect spring break trips to continue to be canceled, and no summer trips to be booked until the number of new cases peak."

Things could get even worse, despite airlines' best preparations made in the years since 2008's financial recession. It's not untenable that the business climate could get worse than it did following the terrorist attacks of September 2001, when wide swaths of airspace were closed and demand for air travel shrank considerably.

"Yesterday, the decline in bookings mirrors the period after 9/11," Cowen said.

Southwest Airlines CEO Gary Kelly also told CNBC that the decline in demand from the coronavirus outbreak is similar to that in 2001, saying that "it has a 9/11-like feel."

"Our estimates are, on average, 30% below consensus forecasts for 2020, and that feels too high," Cowen's note continued. "Our estimates don't take into account today's announcement as airlines are trying to get on top of this through capacity cuts."

There's also the possibility of bankruptcies roiling the industry even further.

'We previously stated US airline bankruptcies were unlikely and in the near-term that still remains the case," said Cowen, "BUT if bookings do not improve in the next 3 months things could deteriorate quickly."