Shares of airline and other travel stocks plunged on 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 is “out of control” in the U.K.
More than 16 million Britons are now required to stay at home after new restrictions came into force in London and southeast England.
In response, 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 until at least Tuesday, while Italy, the Netherlands and Belgium halted air, train and ferry links. 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.
Other airlines including Alaska Airlines (ALK) - Get Report, JetBlue (JBLU) - Get Report and Southwest Airlines (LUV) - Get Report also traded lower, as did shares of Carnival (CCL) - Get Report and Royal Caribbean (RCL) - Get Report.