It was another tough day of trade for the Qantas Airways Limited (ASX: QAN) share price on Monday.
Market turbulence was particularly severe and sent the airline operator's shares tumbling 10% lower to a 52-week low of $4.18.
When Qantas' shares hit that level, it meant they had lost a whopping 44% since peaking at $7.46 in December.
Why was the Qantas share price sold off?
Investors were selling the airline operator's shares amid concerns over the coronavirus outbreak and its continued impact on the travel industry.
This follows the collapse of British airline Flybe at the end of last week and a disappointing update from Air New Zealand Limited (ASX: AIZ) this morning.
In respect to the latter, earlier today Air New Zealand announced that it would be withdrawing its FY 2020 earnings guidance. This was due to the increased uncertainty surrounding the duration and scale of the coronavirus outbreak.
Given that Air New Zealand had only reconfirmed its guidance two weeks ago, this demonstrates just how rapidly trading conditions have deteriorated in the industry.
According to the release, Air New Zealand has seen further softness in demand with a decline in bookings across its network over the course of last week. This was caused by the ongoing spread of the coronavirus to countries outside of China, which has driven a downward shift in demand.
In light of this, I don't believe it is surprising to see Qantas and travel booking companies such as Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) trading sharply lower today.
And whilst I think that they have been severely oversold, I fear they may remain under pressure until travel markets return to normal.
Hopefully this is a matter of weeks and not months, but there are still unfortunately a lot of unknowns out there. For now, I will be keeping my powder dry and piling in when the time is right.
