COVID-19 shock hits US airlines, but there is no blueprint to follow

The US government's decision to initiate a travel ban covering the Schengen Area of Europe is essentially rubbing salt into the wounds the country's airlines are suffering as the COVID-19 coronavirus has reached pandemic status, and that decision significantly raises the levels of uncertainty about when a recovery in demand will occur.

As the country's largest airlines American, Delta and United navigate the effects of the ban, they are also likely being forced to examine their long term view of how they plan to rebound once the pandemic is over.

With US and world markets continuing to get pummelled, those airlines may need to change their judgement that COVID-19 is a "fear event" rather than an "economic event". The public health emergency caused by COVID-19 has now turned into an economic crisis, whose duration is impossible to predict.

Attempts to compare this black swan event to 9/11 or SARS could soon be rendered irrelevant as sports teams suspend their seasons and an increasing number of employees are being required to work from home. The economic reverberations will be deep, and the timing of any recovery is by no means yet within view.