Shares of airline stocks plunged Monday after the U.K. said it would impose harsher restrictions after discovering a more transmissible form of Covid-19, prompting countries around the world to ban travel to and from Britain.
Shares of American Airlines (AAL) - Get Report, Delta Air Lines (DAL) - Get Report and United Airlines (UAL) - Get Report, the three biggest U.S. carriers, all plunged in premarket trading after U.K. Prime Minister Boris Johnson warned that a new strain of the coronavirus deemed to be 70% more contagious was “out of control” in the U.K.
Shares of American Airlines were down 3.88% at $15.77 in trading on Monday, while shares of Delta Airlines were down 1.97% at $39.88 and United Airlines was down 3.03% at $43.38. Other airlines including Alaska Airlines (ALK) - Get Report, JetBlue (JBLU) - Get Report and Southwest Airlines (LUV) - Get Report also traded lower.
More than 16 million Britons are now required to stay at home after new restrictions came into force in London and southeast England. The measures ban household mixing in the capital and the southeast, and restrict socializing to just Christmas Day across the rest of England.
France on Sunday suspended inbound travel from the U.K. for 48 hours and Germany halted arriving flights from Britain. Ireland banned flights with the British mainland at least until Tuesday, while Italy, the Netherlands and Belgium halted air, train or ferry links earlier. Canada and Chile also announced flight bans to and from the U.K.
The unexpected escalation in restrictions in the U.K. in turn raised concerns about additional closures and lockdowns in the U.S. as well as travel bans to and from the U.K. It also raised concerns about just how long it may take the broader travel and tourism industry to recover from the pandemic, despite the rollout of vaccines.
Meantime, U.S. airlines are looking at an additional $15 billion in financial aid as part of the pandemic aid package negotiated by congressional leaders. The legislation is similar to provisions in an earlier pandemic aid package that expired on Oct. 1, which barred layoffs and came with other restrictions.