Things just can’t seem to get much worse for the global aviation industry…until they do of course.
New fears surrounding the Omicron variant of COVID-19 have seen airline and travel stocks plummet, as countries across the world scramble to announce new travel restrictions.
Mayday, we’re going down!
Flight restrictions emerged swiftly on Friday, with the UK, U.S., and EU all suspending travel to and from areas of southern Africa. Airline stocks declined rapidly in response: Boeing dropped 5.4%, Delta Airlines plummeted 8.3%, and United Airlines fell by 9.6% following the news.
Airlines weren’t the only group feeling the pinch either, with Hotel giants Marriott and Hilton tumbling by 6.5% and 6.3% respectively. This comes off the back of a recent upturn for these stocks. Earlier in November, the long-awaited reopening of the U.S. borders saw these stocks soar in what many had termed a travel revival.
Now, all that progress lays in ruin and the immediate future of international travel once again appears uncertain. Only a small number of services may be suspended, but the general unease around traveling created by this news will echo across the entire industry.
The holiday season is a critical period for the industry, and these new measures will likely eat into any potential revenue it could have generated. All this leaves investors wondering what to do next? Should they hold strong and pray for better days or cut their losses and move on?
It’s a difficult question to answer, and the answer lies in your own personal situation. I, for one, am hopeful that it will pass. Travel is such a large part of our lives and eventually, things will return to normal.
Travel stocks will recover, and so will the world.
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Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.