European Airlines Weaker As EU, U.S. Try to Limit Transatlantic Travel

  • Stock Market News
European Airlines Weaker As EU, U.S. Try to Limit Transatlantic Travel
Credit: © Reuters.

By Dhirendra Tripathi – Stocks of most European airlines traded lower Tuesday as the EU dropped the U.S. from its ‘safe travel list’ and the latter, for its part, released a ‘do not travel’ advisory for several countries on the continent.

Shares of British Airways-owner IAG (LON: ICAG ) fell 2.7% in London trading. Air France KLM (PA: AIRF ) traded flat.

Deutsche Lufthansa (DE: LHAG ) fell 1.1% as traders chose to ignore CEO Carsten Spohr’s comment that the German airline will generate positive cash flow this summer. The U.S. on Monday raised the alert status for arrivals from both Germany and neighboring Switzerland.

Stocks of low-cost carriers EasyJet (LON: EZJ ) and Ryanair (LON: RYA ) also fell, by 1.7% and 2.1%, respectively.

The respective decisions by the U.S. and the EU were prompted by the surge in Covid-19 cases in the two regions, more so in the former where the spread of the delta variant has taken the number of new infections to levels last seen at this winter's peak of the pandemic.

The U.S. is averaging more than 155,000 new coronavirus cases and 1,200 deaths per day, overwhelmingly among the unvaccinated part of the population.

The EU’s decision isn’t binding, as public health policy remains a competence of its member states. It also contains waivers for those who have been fully vaccinated, in important loophole. U.S. travelers will have to be immunized with one of the vaccines approved by the EU, which includes Pfizer (NYSE: PFE ), Moderna (NASDAQ: MRNA ), AstraZeneca (NASDAQ: AZN ) and Johnson & Johnson.

Possible restrictions on U.S. travelers could include quarantines, further testing requirements upon arrival or even a total ban on all non-essential travel from the U.S., according to a report by AP.

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