LOS ANGELES/PARIS: European airline stocks already battered by the coronavirus plunged again on Thursday, as a US travel ban on much of continental Europe deepened the sector’s misery and piled pressure on governments to offer emergency support.
Shares in European carriers, some of which have fallen by more than half since the virus outbreak first halted flights to China, suffered further double-digit declines as markets opened.
The 30-day US curbs on travel from the 26-country Schengen Area — which excludes Britain and Ireland — are similar to those that went into effect targeting China on February 1 and do not apply to US residents or their immediate family.
“The impact of the ban will be more substantial” for major European carriers than the earlier China flight suspensions, Bernstein analyst Daniel Roeska said — because the North Atlantic accounts for a large share of their long-haul profits.
“The ban effectively stops travel from the Schengen Area to the USA,” Roeska said.
Air France-KLM shares were down 15 per cent, with Lufthansa and British Airways parent IAG almost 11 per cent lower as of 08:33 GMT. Norwegian Air, which was struggling to avert a cash crunch even before the coronavirus crisis, was down 18 per cent.
Lufthansa said it was assessing the impact of the changes on its US operations, while Air France KLM did not respond immediately to a request for comment.
The news also sent Asian airline shares sliding during the region’s trading day, with analysts warning of a big impact.
It came as airlines, tourism and airport operators were already scrambling to respond to a global slump in travel that is increasingly likely to require government aid to tide companies through the crisis. The European Union will publish new state-aid guidelines on Friday.
ADP declined to comment on a Thursday report that it was preparing to close terminal 3 at Roissy Charles de Gaulle, the French capital’s biggest airport. Norway is considering whether to close down several airports as part of its efforts to curb the spread of the virus, airport operator Avinor told the public broadcaster NRK. US President Donald Trump said the ban were needed because the country was entering a “critical time” in the fight against the virus. — Reuters
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