Skip to main content

Airline Stocks Slump on Omicron Woes Amid Market Selloff

U.S. air carriers took a beating Tuesday as investors feared that the Covid omicron variant could hurt travel as badly as the virus hit it last summer.

Shares of airline stocks struggled Tuesday as the omicron variant revived investors' concern that the travel sector could be among the worst-hit industries. 

Moderna Chief Executive Stéphane Bancel also warned on Tuesday that current vaccines will be far less effective against the omicron strain.

Airline stocks are also lower amid a broader market selloff. 

At last check shares of Delta Air Lines  (DAL) - Get Delta Air Lines, Inc. Report fell 1.2%, Southwest  (LUV) - Get Southwest Airlines Co. Report dropped 1.6%, United Airlines  (UAL) - Get United Airlines Holdings, Inc. Report traded 2% lower and American Airlines  (AAL) - Get American Airlines Group, Inc. Report stock tumbled 2.3%.

Shares of Jetblue  (JBLU) - Get JetBlue Airways Corporation Report retreated 1.8% and Alaska Air  (ALK) - Get Alaska Air Group, Inc. Report slipped 2.4%.

TheStreet Recommends

Shares of ride-sharing apps Uber and Lyft fell 5% and 4.3% respectively on fears of potential lockdowns due to omicron.

Bancel also said that drugmakers would take months to manufacture new variant-specific vaccines at scale.

With new cases discovered in the U.K., Europe, Africa and Asia, governments around the world have imposed travel restrictions, starting Monday, on seven African countries in a bid to control the spread of the variant, which originated in Johannesburg.

The World Health Organization has named omicron a "variant of concern."

"If you have a selloff on the ride-sharing stocks, the travel stocks, that is probably a buying opportunity," EvercoreISI tech analyst Mark Mahaney told Yahoo Finance.

"I find it hard to believe we will have a repeat of the stocks we had which were massive last March, last April and a year and a half ago."