The usual stock associated with the coronavirus has been surging on Wednesday, with some vaccine makers seeing shares almost doubling over the course of the day. However, other sectors continue to suffer as further outbreaks continue to be reported. Airline stocks, in particular, have had a terrible time over the past couple of months. At first, the loss of Chinese airfare weighed on airline shares, but now it seems that things are getting even worse for the industry.
President Trump announced on Wednesday that there would be a ban on all European flights in light of recent outbreaks in countries like Italy, where the number of confirmed cases has gone past 12,000. France, Spain, and Germany have seen their numbers swell to around 2,000 as well. In comparison, the U.S. has around 1,312 confirmed coronavirus cases, while its neighbors, Canada and Mexico, and around 110 and 10 cases, respectively.
“The European Union failed to take the same precautions [as America] and restrict travel from China. As a result, a large number of clusters in the United States were seeded by travelers from Europe. We will be suspending all travel to Europe from U.S. for the next 30 days,” said Trump. The only exception would be flights from the United Kingdom, where there are only 450 confirmed coronavirus cases so far. While Western Europe has been hard hit, Eastern European countries remain relatively free from coronavirus outbreaks so far.
Shares of U.S. airline stocks have tumbled across the board. The three companies with the biggest European businesses include United Airlines (NASDAQ: UAL), Delta Air Lines (NYSE:DAL), and American Airlines (NASDAQ: AAL), with all three companies generating around 15% of their total sales from flights across the Atlantic ocean.
Analysts are already wondering how much the airline industry could lose in total revenue due to the coronavirus. Many experts are comparing it to the months following 9/11, where airline traffic saw a substantial decrease. Although it’s uncertain whether things will get that bad, it’s clear that it will take quite some time for airlines to recover financially from the impact this outbreak has produced.
United Airlines is down 6.1% over the course of the day, with the stock having lost almost half of its value over the past month. The same could be said for Delta Airlines and American Airlines, both of which lost 6.1% and 4.4% as well on Wednesday. Delta has faired a bit better over the month, losing around 30% of its value, while American Airlines has declined by just under 50%. While some investors think that these discounts could make a good buying opportunity, it’s likely that shares will continue to plummet in the weeks and months to come.
United Airlines Company Profile
United Airlines operates more than 4,500 flights a day to five continents. United’s hubs include San Francisco, Chicago, Houston, Denver, Los Angeles, New York/Newark, and Washington, D.C. United operates more than 740 mainline aircraft. The airline is a member of the Star Alliance, which provides service to 192 countries via member airlines. In 2018, the carrier posted $41.3 billion in revenue, of which $37.7 billion was passenger revenue. – Warrior Trading News
