Ebola fears drive airline stocks lower
Air Canada and WestJet shares caught up in pessimism as 1st North American infection confirmed
Shares in virtually all of the world's major airlines were sharply lower on Wednesday after confirmation of the first Ebola patient diagnosed in North America prompted fears of a worldwide move away from air travel.
U.S. airlines like American Airlines, Delta and United all saw their shares drop by between three and four per cent on Wednesday. Shares in Canadian carriers Air Canada and WestJet were off by just under five and 1.6 per cent, respectively.
"People are nervous about [Ebola in the U.S.] and what it means," said Michael Derchin, an airline analyst at U.S. brokerage CRT Capital Group.
Officials at the CDC in Atlanta confirmed Tuesday that the as-yet-unnamed patient travelled from Liberia to Brussels and on to Dallas. Health officials were quick to play down the threat to public safety, but stock market reaction made it clear fears persist, unfounded or not.
The European company that owns British Airways and Iberia was off by three per cent, while Air France/KLM's owner was down by nearly five per cent.
JetBlue and Southwest were both also lower despite the fact that neither of those companies has any sort of African presence.
"African travel isn't a huge part of the travel industry, but it does seem like some parts of the industry are likely to be disrupted from this," said Mitch Rubin, chief investment officer at RiverPark Advisors in New York."
Derchin and others say while travel-related stocks are taking a hit, actual travel itself is unlikely to be impacted in any real way unless the crisis gets a lot worse.
"I would be surprised if there's any impact on travel," Derchin said.
With files from Reuters