Airline, hotel and cruise stocks drop on Covid
PHILADELPHIA: Air travel to the United States hit another pandemic-era record over the weekend as vacationers blocked airports, but actions by airlines, cruise lines, hotels and almost everything travel-related fell on Monday amid growing concerns over highly contagious variants of the coronavirus.
The Transportation Security Administration (TSA) said it screened more than 2.2 million people at airport checkpoints on Sunday, the highest number since early March 2020, when the pandemic began to crush travel to the United States.
This broke a record set just two days earlier and was the fourth peak recorded in July. However, Sunday’s score was still 18% lower than the comparable Sunday of 2019, according to the TSA.
But investors were not celebrating the latest evidence of a recovery in travel since Covid-19 vaccines became widely available in the United States Stocks fell widely – the Dow Jones Industrial Average lost 2.1% – in Due to concerns about rising infections in many countries, and airline and cruise line stocks have been particularly hard hit.
Shares of United Airlines fell 5.5%, American Airlines and Delta Air Lines each fell about 4%, and Southwest fell nearly 3%.
Inventories for cruise lines have fallen to levels last seen before vaccines became widely available to Americans. Carnival, Royal Caribbean and Norwegian Cruise Line Holdings each lost between 4% and 6%. Hotels and Airbnb have also slipped.
Shares of Boeing, which is just starting to see a pickup in aircraft orders, fell 5%. Tensions rose Monday between the United States and China – a huge market for planes and which has not lifted the immobilization of the Boeing 737 Max – when the United States and its allies officially blamed China for a major hacking attack.
Airlines said domestic leisure travel has returned to pre-pandemic levels, but international travel and business travel remain significantly lower than in 2019. This is particularly bad for American, United and Delta, which derive a significant portion of revenues from international and business travel.
Airlines are frustrated that restrictions on international travel have not been eased faster. The rise in coronavirus infections – the daily rate of new cases reported in the United States has more than doubled in the past two weeks and the World Health Organization has said the Delta variant is increasing cases and deaths due to Covid-19 around the world after a period of decline – could delay moves to facilitate travel.
After massive losses last year, airlines are doing better with more Americans booking flights. Delta reported second-quarter profit last week, thanks to federal pandemic assistance. United, American and Southwest are releasing their results this week.