US airline stocks down on coronavirus fears

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People walk past “The Fearless Girl” bronze sculpture, by Kristen Visbal, outside the New York Stock Exchange on March 11, 2019 in New York. – The benchmark Dow Jones Industrial Average was flat midmorning, recovering from steep early losses driven by tumbling shares in US aviation giant Boeing following Sunday’s fatal crash in Ethiopia. Around 1430, Boeing shares were down 8.4 percent at $387.01, up from the steeper plunge before the market open following the fatal crash of the Ethiopian Airlines Flight ET302 — the second involving a Boeing 737 Max 8 in five months. (Photo by Don Emmert / AFP) / RESTRICTED TO EDITORIAL USE – MANDATORY MENTION OF THE ARTIST UPON PUBLICATION – TO ILLUSTRATE THE EVENT AS SPECIFIED IN THE CAPTION (Photo credit should read DON EMMERT/AFP/Getty Images)

Shares of Delta, United and American Airlines were all lower Tuesday as investors worried that the coronavirus outbreak in China could affect global air travel.

The outbreak is in the Chinese city of Wuhan in the Hebei province. Six people have reportedly died from the disease, which can cause pneumonia-like respiratory problems.

Last year, more than 60,000 passengers flew into the United States from Wuhan, a city 700 miles south of Beijing. That’s a sliver of the air travel market between the United States and China, so any slowdown to and from that city would have limited impact on airline travel.

But the concern is that the disease, which is similar to SARS, could spread and affect travel to and from a much wider part of China and even the rest of Asia, perhaps even reaching other continents.

More than 100 staffers from the US Centers for Disease Control and Prevention are already being deployed to three US airports to check passengers arriving from Wuhan, China, for fever and other symptoms of the disease. It is a relatively rare step that was previously taken only during the 2014 Ebola outbreak, according to a CDC official.

Travel between the US and China was already affected in recent months by the protests in Hong Kong, which have been a drag on airline stocks. United, which reports fourth quarter numbers after the bell Tuesday, warned investors that it will take a $90 million charge for issues related to the temporarily suspended flights between Chicago and Hong Kong last fall.

The airline said there was reduced demand for travel on that route. At the time, Hong Kong was in the third month of mass demonstrations, although the United did not cite that as a reason for the suspension. United has since resumed that route.

Shares of United were down more than 3% in morning trading Tuesday, while shares of Delta and American each fell nearly 2%. Even shares of Southwest, which doesn’t serve Asia, were slightly lower Tuesday on fears about the impact on air travel overall.

And it wasn’t just airline stocks being hit.

US casino operators that own properties in Macau, China, were also sharply lower on what the outbreak could mean for their Asia businesses. Wynn Resorts and Las Vegas Sands were both off nearly 5%, while MGM Resorts International shares fell 4%.

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