Airline stocks swooned yet again on Thursday after President Donald Trump announced a 30-day ban on Europeans traveling to the U.S., hammering an industry already at risk of losing as much as $113 billion in passenger revenue this year because of the coronavirus.
Shares of the three biggest U.S. carriers that fly to and from Europe - American Airlines (AAL) - Get Report, Delta Air Lines (DAL) - Get Report, and United Airlines (UAL) - Get Report - were all significantly lower at the open of trading in New York on Thursday, accelerating losses that have been sparked by the lethal virus that already has people and companies cancelling plans.
The ban, to take effect Friday at midnight, will apply to all foreign nationals who have been in European countries excluding the U.K. in the previous two weeks, Trump said from the Oval Office in a Thursday night address to the nation.
Minutes later, his administration told U.S. citizens to reconsider all foreign travel.
The controls will inevitably mean more cancelled flights and routes at U.S. and international airlines, starting with Europe and likely extending globally, as travel demand craters.
The International Air Transport Association, or IATA, had already estimated that the airline industry globally could take a hit of up to $113 billion from virus-related travel disruptions.
“As the scenario continues to evolve, so does the assessed impact,” IATA, which represents about 290 airlines globally, said in a statement Thursday after the U.S. announcement.
While Trump and other White House officials had met with travel industry executives this week, Thursday’s travel ban, specifically its scope and scale, caught the airline industry and many others off-guard.
“This action will hit U.S. airlines, their employees, travelers and the shipping public extremely hard,” Airlines for America CEO Nicholas Calio said in a statement. “However, we respect the need to take this unprecedented action.”
“Temporarily shutting off travel from Europe is going to exacerbate the already-heavy impact of coronavirus on the travel industry and the 15.7 million Americans whose jobs depend on travel,” U.S. Travel Association President Roger Dow said in a statement.
Since Jan. 20 - the week that the first Covid-19 cases outside China emerged including the first patient in the U.S. - the airlines shares collectively have fallen more than 40%.
Trump’s controls on travelers from Europe don’t apply to legal permanent residents and immediate family members of U.S. citizens. Americans arriving from Europe will travel through specific airports where they can be screened for the virus.