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Travel stocks slide as omicron triggers mass flight cancellations

Stocks in the United States travel sector dropped on Monday over rising omicron cases and hundreds of more flight cancellations, which left travelers stranded across the country during the holidays.

Over 1,000 flights were canceled within, into, or out of the U.S. on Monday, data from flight-tracking website FlightAware.com showed. Globally, more than 2,600 flights were scrapped.

That was on top of over 3,000 flight cancellations during the Christmas holiday weekend, typically a peak time for travel for Americans.

The shares of American Airlines Group, United Airlines Holdings and Delta Air Lines were down about 1% in afternoon trade. Southwest Airlines’ shares recovered its losses to trade about flat.

Most airline stocks have rallied this year on hopes of a travel boom as travelers start visiting friends and family after dealing with pandemic-related restrictions last year.

However, staff shortages at airlines, weather-related disruptions and now the fast-spreading omicron variant have disrupted flights frequently this year.

Poor weather in some areas has also added to travelers woes.

Southwest Airlines said it had canceled about 50 of the 3,600 flights scheduled Monday due to weather-related problems. United Airlines said it had called off 115 of the 4,000 flights that were scheduled, while Delta expected to cancel over 200 of 4,166 of its scheduled flights.

American Airlines pointed to its statement on Saturday that said the carrier had to cancel flights due to “COVID-related sick calls.”

Separately, the Shanghai government said on Monday that the country’s aviation regulator would suspend two China Eastern Airlines Corp flights from New York to Shanghai from Jan. 3 due to rising COVID-19 cases.

Other travel stocks also came under pressure as omicron triggers fears of tougher restrictions.

Shares of Carnival were down 1.1%, while its peers Norwegian Cruise Line Holdings and Royal Caribbean Cruises Ltd were down about 2%.

Carnival Corp said it had isolated a small number of passengers on board its Carnival Freedom cruise ship due to positive COVID-19 test results. All passengers from the cruise trip disembarked on Sunday, and the ship departed Monday afternoon on its next planned voyage, it added.

Travel firms Expedia Group and Tripadvisor fell between 1% and 1.6%. Vacation rental firm Airbnb, hotel operators Marriott International Inc and Hilton Worldwide Holdings all recovered losses to trade about flat in the afternoon.

Source
dailysabah

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