Airline Stocks Hit Turbulence On Europe Gloom Despite Soaring US Air Travel 

Airline Stocks Hit Turbulence On Europe Gloom Despite Soaring US Air Travel 

The US cash market open sparked a panic rotation into big-tech (growth) and out of value (Small Caps). One of the worst performers of the cash session has been airlines due to Europe gloom despite a boost in US travel over the weekend. 

International Consolidated Airlines Group, with segments that include British Airways and Iberia, two value carrier, Aer Lingus and Iberia Express, and two low-cost carriers, LEVEL, and Vueling, closed down more than 5% on London exchanges Monday as the UK government warned that COVID-19 cases could restrict travel this summer.

Even with the average number of new daily cases in the UK has declined substantially in recent weeks, top UK leaders tell people not to travel this summer due to the risk of new COVID-19 variants and additional travel restrictions. 

But for Europe as a whole, new virus cases are surging compared with the US that is dropping.  

The rollout of vaccines in Europe has also been slower than the US. The latest concern over a possible connection between the Oxford-AstraZeneca vaccine and reported blood clot appears to have already slowed down vaccinations. There are threats the continent is facing the third wave. 

Helen Whately, Minister of State for Social Care, told BBC this morning that “it just feels premature to be booking international holidays at the moment.” She repeated comments made by Defence Secretary Ben Wallace on Sunday.

This comes as “Paris lockdown, Italy’s national restrictions and rising concern in Germany over infection rates are being reflected in growing fears that the second summer of travel will be lost,” Goodbody analyst Mark Wallace told the FT. 

Investors also panic dumped airlines in the US. JetBlue and Spirit Airlines were some of the worst performers around 1300 ET. 

S&P Airlines index slump more than 2%. 

Airlines in the US are down despite a surge of US travelers. The Transportation Security Administration screened more than 4.3 million people between Friday and Sunday, setting a new high since the virus pandemic devastated travel a year ago.

“TSA screened 1,543,115 people yesterday, Sunday, March 21. The last time checkpoint throughput topped 1.5 million was March 15, 2020–just more than a year ago. Yesterday was also the 11th consecutive day with checkpoint volume exceeding 1 million,” tweeted TSA spokesperson Lisa Farbstein. 

It’s surprising that investors algos are focused on European developments rather than the US. 

Tyler Durden
Mon, 03/22/2021 – 15:20

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