Airline stocks sink for second day amid coronavirus sell-off
Airline stocks continued their decline today as investors continued to sell over growing fears over the economic impact of the deadly coronavirus outbreak.
Norwegian Air was the worst affected, falling almost 13 per cent, whilst budget carrier Easyjet and tour operator Tui both fell around three per cent.
British Airways-owner IAG, Ryanair, Lufthansa and Wizz Air were all also in the red, falling between one and two per cent in the morning session.
Yesterday the combination of spooked passengers and cancelled services conspired to send shares in airlines into a tailspin, with Easyjet seeing its market cap fall by nearly 17 per cent.
Collectively the sector’s performance sent the FTSE 100 to its worst day in three years as London’s blue-chip index shed 3.3 per cent over the course of trading.
The fall was largely driven by a spike in cases of the disease, which has now infected almost 80,000 people worldwide, in Italy, which has now confirmed over 260 cases, with seven deaths.
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Joshua Mahony, senior market analyst at IG, said: “The declines seen for largely European-focused airlines such as easyJet and Ryanair yesterday highlights the increasing fear that we will see travel locked down closer to home, with obvious knock-on implications for consumer activity should that occur.
“Thus, markets are likely to be highly sensitive to any significant updates to Italian efforts to curb the virus, with stocks standing ready to slump on news that could imply an increased chance of contagion throughout European nations”.
Shares had initially gained on yesterday’s losses as markets opened, but swiftly fell back into the red over fears of an Italian shutdown.
Travel woes worsened as British Airways said it had extended its suspension of flights to China until after Easter, due to increased fears over the virus.
The firm, which had previously said it would cancel all flights to and from Beijing and Shanghai until 1 April, has now said it is extending the ban for over two more weeks until 17 April.
The decision is the third time that the airline has decided to extend the suspension as the outbreak of the disease continues to worsen.