- Shares of cruise operators and airlines were hit Monday as COVID-19 infections ramp up worldwide.
- Carnival, American Airlines and Expedia were among the stocks that slumped on worries of new virus infections.
- The CDC on Monday warned travelers to avoid going to the UK because of rising infections.
- See more stories on Insider’s business page.
Shares of airlines, cruise operators and other travel companies slumped Monday during a selloff set off in part on mounting cases of COVID-19 infections worldwide, highlighting concerns about recovery in the industry and in the global economy.
American Airlines lost 4.4% and cruise operator Carnival fell 5.4% as part of a broader slide in US stocks that saw the Dow Jones Industrial Average plunge by more than 900 points during the session. On the Dow, airplane maker Boeing moved 5% lower.
Meanwhile, Carnival, Norwegian Cruise Line Holdings fell 6% and Royal Caribbean Cruises lost 4.6% after a US appeals court ruled late Saturday that cruise restrictions put in place during the pandemic could continue in Florida, according to the Associated Press.
Travel stocks were hit as countries worldwide report rising infections of coronavirus from the Delta variant, which health experts say is the most transmissible strain yet. Infections in the US were rising in all 50 states, with Los Angeles County, the largest in the country, reimposing indoor mask mandates. Delta Air Lines declined 3.7% and Southwest Airlines gave up 2.5%, weighing on the US Global Jets ETF which fell 3.9%. COVID-19 cases have surpassed 190 million.
“Jet fuel demand will struggle as international travel is not happening anytime soon, especially given how several Americans are struggling to get their passports renewed even with expedited services. Even domestic travel to Hawaii is losing appeal given the limited availability for car rentals, lack of hospitality workers, and extreme price hikes for lodging and dining,” said Ed Moya, senior market analyst at Oanda, in a note.
On Monday, the US Centers for Disease Control and Prevention advised Americans against traveling to the UK because of the spread of COVID-19 in the country.
The UK recorded more than 50,000 new cases for the first time in six months on Friday. Travel stocks there on Monday dropped after the UK government said fully vaccinated travelers entering from France must still quarantine, a move made as French cases increase. France on Sunday posted a third day of more than 10,000 new infections.