Trump’s Travel Ban Imposed Because of Coronavirus Crashes Most European Airlines Stocks

UTC by Steve Muchoki · 3 min read
Trump’s Travel Ban Imposed Because of Coronavirus Crashes Most European Airlines Stocks
Photo: Unsplash

After the emergency travel ban that was imposed by President Donald Trump on most European countries, the airlines stocks have plunged nearly 10%-15%.

Following a directive by Donald Trump to halt all air travel from a dozen countries in Europe for the next 30 days, airline stocks fell drastically by nearly 10%. The travel ban affects, first of all, the European market. Deutsche Lufthansa AG (ETR: LHA) was trading 10% lower, wiping out all the profit gains made this year. Air France-KLM SA (EPA: AF) tumbled 12%, shedding more than half of this year’s gains. The hardest hit was Norwegian Air Shuttle ASA (OTCMKTS: NWARF) stock that dipped 16% rising the total losses incurred this year at 80%.

The British Airways parent company International Consolidated Airlns Grp SA (LON: IAG) fell 15% in London despite the UK not being listed in the countries banned from traveling to the United States. As a result, the airlines have taken drastic measures to counter the falling stock and also assist in keeping a stable balance sheet. Some have been reported putting their employees on unpaid leave, others reduce or stop the hiring process in a bid to cut the operational cost.

The American airlines were affected too by the ban, as they will not be operating in that route until the ban is lifted. The American Airlines Group Inc (NASDAQ: AAL) stock suffered a 17% downfall, while its counterpart the United Airlines Holdings Inc (NASDAQ: UAL) stock went down by 24.85%.

According to Bernstein analyst Daniel Roeska, Lufthansa, United Airlines and also Delta Air Lines Inc (NYSE: DAL) are going to be the hardest hit as they are the largest shareholders of transatlantic flights. Donald Trump was categorically clear, stating that the restrictions will apply to 26 countries in the Schengen area, to assist curb new coronavirus cases from making their way into the country.

Will the Travel Ban Which Affects Airlines Stop Coronavirus Spread?

Coronavirus has been spreading fast and wide in the United State since the first case was reported. Numbers have shot up to reach more than 1,200 people confirmed with the virus and nearly 40 deaths reported by the health officials. In a televised press, Donald Trump said:

“The European Union failed to take the same measures as America and restrict travel from China. As a result, a large number of clusters in the United States were seeded by travelers from Europe.”

The devastating effect of coronavirus on the American can only be compared to the 9/11 terrorist attack, which left the U.S. airline stock market down over $13 billion. 

The blame game might not help at the moment since the virus is already on the ground and threatening a lot of people. As a result, it seems all the stock market is in red and threatening to push more if the travel bans and lock-downs becomes the order of the day. The best thing we can do as humankind is hope the virus is quickly contained and support each other to avoid the possibility of a dark-age!

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