IAG and other European airlines see share prices tumble after Trump travel ban
British Airways-owner IAG and its European peers have all seen their shares take a major tumble on Thursday in reaction to US President Donald Trump’s decision to ban all travel from Europe to fight the COVID-19 outbreak.
British Airways-owner IAG saw shares fall 11% in early morning trading on Thursday, following the announcement by US President Donald Trump to ban all travel from Europe into the US to fight the coronavirus outbreak.
‘The European Union failed to take the same precautions [as America] and restrict travel from China,’ Trump said on Wednesday evening in a televised address. ‘As a result, a large number of clusters in the United States were seeded by travellers from Europe.’
‘We will be suspending all travel to Europe from U.S. for the next 30 days,’ he added. ‘The ban doesn’t apply to flights from the United Kingdom.’
IAG is trading at 366p a share as of 12:45 (GMT).
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European airline stocks tumble after Trump travel ban
News of Trump’s travel ban saw European airline stocks tumble on Thursday, with Germany’s Lufthansa down 6%, while Air France-KLM and Norwegian Air both fell by as much as 17% and 33% respectively.
However, it wasn’t just European airlines that were hurt by the travel ban, US airlines like Delta, and United Airlines, which both boast the largest share of transatlantic flights are both down 15% in pre-market trading.
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Collapse of Flybe could be first of many
The coronavirus has hit the airline industry hard, with travel bans, flight cancellations and weakening demand proving too much for Europe’s largest regional airline Flybe, which fell into administration earlier this month.
The collapse of FlyBe makes it the second major British airline to go bust in six months, with Thomas Cook going bankrupt in September last year.
The airline industry will be hoping that the coronavirus will be eradicated soon, but with the UK seeing its biggest daily raise in cases on Wednesday to 460, things look likely to get a lot worse before they get better.
If that is the case, prolonged pressure on European airlines could see others fall on hard times.
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