Boeing, airline stocks tumble as new Covid variant spurs travel curbs

Boeing, airline stocks tumble as new Covid variant spurs travel curbs


Passengers, wearing protective face masks, walk through the international arrivals hall after arriving at Terminal 2 at London Heathrow Airport.

Simon Dawson | Bloomberg | Getty Images

Boeing, airlines and other travel stocks tumbled on Friday after several European and Asian countries announced new travel restrictions from southern Africa because of a new Covid variant.

The U.K. on Thursday said it would temporarily suspend flights from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe and Botswana. The European Commission recommended a pause on travel between the EU and southern Africa.

South African scientists detected the variant, which contains high numbers of mutations, raising concerns that it could spread quickly.

Health officials cautioned more research is needed, but the new travel restrictions highlight how quickly countries can limit travel as new variants are detected. The fast-spreading delta variant of the virus earlier this year drove down travel demand and prompted some companies to delay employees’ return to the office.

Airlines and aircraft manufacturers like Boeing have been upbeat about a rebound in travel demand, particularly from a recent drop in cases and after the U.S. lifted entry restrictions earlier this month.

Travel and aerospace shares fell more than the broader market on Friday. Boeing shares were down more than 7% in morning trading.

Delta Air Lines and United Airlines are the only U.S. carriers with nonstop service scheduled to and from South Africa next month. United was down 12% in morning trading, while Delta was off more than 10%. American Airlines also was off about 11%. Hotel giant Hilton was down more than 7% and Marriott was off about 10%.

There are 122 flights between the U.S. and South Africa scheduled for December, according to aviation consulting firm Cirium. United, which has the most scheduled service with 87 flights, is set to resume nonstop flights between its Newark, New Jersey, hub and Cape Town next month. A spokeswoman said no changes are currently planned.

Delta has 35 scheduled flights between the U.S. and South Africa in December.

“Delta will continue to work closely with our government partners to evaluate any changes to U.S. policy,” the airline said in a statement.

British Airways will operate 214 flights between London and South Africa next month, while Virgin Atlantic will operate 75, according to Cirium.

“Following the latest announcement from the Health Secretary we’re working through plans for our customers and colleagues currently in South Africa and those due to travel from the UK in the coming days,” British Airways, an American Airlines partner, said in a statement. The carrier said it would contact customers affected by the changes.

Delta’s transatlantic partner Virgin Atlantic said it would cancel flights from Johannesburg from Friday to early Sunday because of the new U.K. rules.

The State Department and White House didn’t immediately comment on potential travel restrictions to the U.S.

On Nov. 8, the Biden administration lifted a broad pandemic travel ban on most non-citizens visiting from more than 30 countries, including the U.K., the EU, South Africa and Brazil.

Though domestic travel had largely recovered from early pandemic lockdowns, international travel remained a missing piece in airlines’ recovery.

On Wednesday, the day before Thanksgiving in the U.S. and generally one of the busiest travel days of the year, the Transportation Security Administration screened more than 2.3 million people. That was the most since February 2020, though still 12% below the same day in 2019.

CNBC’s Matt Clinch contributed to this article.



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