Airline Shares Take a Knock as South Africa Warns of New Variant

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Airline Shares Take a Knock as South Africa Warns of New Variant
Credit: © Reuters.

By Dhirendra Tripathi – Shares of airlines were trading sharply lower in Friday’s premarket trading after South Africa’s warning of a new fast-spreading variant of the coronavirus triggered fresh concerns of restrictions on travel and tourism coming back.

American Airlines (NASDAQ: AAL ), United (NASDAQ: UAL ), Southwest (NYSE: LUV ), Delta (NYSE: DAL ), JetBlue (NASDAQ: JBLU ) and Spirit (NYSE: SAVE ) were all trading around 7% lower from their close on Wednesday, Thursday being a market holiday due to Thanksgiving.

Thin volumes on a truncated trading day may also be contributing to the session’s reverses. 

South Africa’s government said Thursday it is considering new restrictions to contain the new variant, dubbed B. 1.1.529.

The signals from South Africa come at a time when many countries in Europe, the other side of the most lucrative transatlantic route, are considering reimposing lockdowns as Covid-19 cases surge again.

Austria and Slovakia are currently in lockdown while Germany is still considering one even as reports say the new incoming coalition government in the country is resisting a lockdown for now. Europe’s largest economy reported as many as 75,000 new Covid cases Thursday.

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