U.S. airline stocks tumbled Monday as an uptick in Covid-19 cases raised concerns about the economic recovery and hit one of the sectors most closely tied to loosened pandemic restrictions especially hard.
United Airlines fell 5.5% while American Airlines dropped 4.1% and Delta Air Lines lost 3.7%. Southwest Airlines ended the day down 2.8%.
Shares of aircraft manufacturer Boeing dropped nearly 5% to $206.99, a more than five-month low, the largest percentage decline in the Dow Jones Industrial Average on Monday.
Travel demand has surged since the spring. Delta and American last week issued upbeat outlooks thanks to a jump bookings. The Transportation Security Administration screened nearly 2.23 million people at U.S. airports on Sunday, the most since Feb. 28, 2020, weeks before the World Health Organization declared Covid a pandemic.
But concerns over the fast-spreading delta variant of Covid, now the dominant strain in the U.S., weighed on the market broadly Monday. Travel stocks that are sensitive to case counts and accompanying restrictions fell more than other sectors.
The trend also raises questions about international travel. International and business travel have been largely missing from airlines’ recent rebound in bookings, though executives earlier this month said they have started to recover. The United States still bars most non-U.S. citizens from entering the country from the European Union, U.K., India and other nations, though the travel industry has repeatedly pressed the Biden administration to lift some of those rules.
The U.S. Centers for Disease Control and Prevention on Monday told individuals to “avoid travel” to the U.K., raising its advisory to a “Level 4,” the agency’s highest. It said if people must travel there they should be fully vaccinated.
Some pandemic rules are returning due to the increase in cases. Los Angeles County reinstated an indoor mask mandate last week, even for people who are vaccinated, due to an increase in Covid-19 cases there. The Southern Nevada Health District, which covers Las Vegas, is also urging everyone to wear masks indoors as cases rise across the state.
Cases in the U.S. have jumped by about 66% in the past week to a seven-day average of about 32,300 new cases per day, according to a CNBC analysis of data compiled by Johns Hopkins University.
Source: Business - cnbc.com
