Boeing along with other travel-related stocks dropped on Friday as the new B.1.1.529 COVD19 variant emerge.
Boeing shares dropped by more than 6% while Delta Air Lines slid by 7% and United Airlines fell by 8%. British Airways parent company IAG SA slipped by 12%, while Deutsche Lufthansa AG, Air France-KLM, and Ryanair Holdings Plc also plummeted by around the same extent.
In reaction to the new variant, European and Asian countries suspended flights from southern African countries.
B.1.1.529 Spreads Faster Than the Delta Variant
On Thursday, the UK temporarily suspended flights from southern African countries. This includes flights from Namibia, Eswatini, Zimbabwe, Botswana, and South Africa. The UK will only allow its own nationals from Sunday onwards to enter the country. However, they will need to complete a mandatory 10-day quarantine. Germany and France announced similar measures on Friday.
Nick Cunningham, an analyst at Agency Partners in London called it “the worst early Christmas present that the airline industry could think of”. He added that “To quote Yogi Berra, this is déjà vu all over again”.
Experts fear that the B.1.1.529 spreads faster than the delta variant. Penny Moore, a virologist at the University of Witwatersrand in Johannesburg said that “We’re flying at warp speed”, as experts look closely at the possibility that the current vaccines are not as effective against the new variant. Moore added that “At this stage, it’s too early to tell anything”.
The European Commission President Ursula von der Leyen on Friday wants an “emergency brake” on air travel from South Africa. This will allow EU countries to announce their travel ban if the situation worsens due to the new variant.
Cunningham said that “It looks rather like a replay of delta but possibly worse”. Cunningham fears that if it is like delta, we can expect “large scale travel bans”.
On November 8, the Biden administration allowed travelers who completed their vaccine doses to enter the US for non-essential travel. This includes EU countries, South Africa, Brazil, and the UK. However, the CDC and the State Department recently issued a “Do Not Travel” COVID19 warning for both Germany and Denmark.