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This story originally appeared on Zacks
The aviation space started on a positive note this year after being battered in 2020 by the coronavirus-led dwindling passenger revenues. The airline stocks have been performing rather well in 2021. However, news about the spread of the highly transmissible new COVID-19 variant (B.1.1529 strain) is a dampener. The new strain (Omicron) — first identified in South Africa — induced fears of fresh travel curbs and the air-travel demand curve again going down.
– Zacks
Adding to the woes, airline stocks faltered on Friday Nov 26, 2021, causing the NYSE ARCA Airline Index to decline 6.5%. Stocks like Delta Air Lines DAL, United Airlines UAL and Ryanair Holdings RYAAY decreased 8.3%, 9.6% and 3.7%, respectively, on Nov 26 from Nov 25’s closing.
Following the detection of the new variant, the United States decided to suspend and restrict the entry of foreign nationals in the United States. However, the restriction will apply only to the passengers who visited South Africa, Namibia, Zimbabwe, Botswana, Lesotho, Mozambique, Malawi and Eswatini during a fortnight prior to their landing in the United States.
However, Delta, which currently operates flights connecting Johannesburg with Atlanta (thrice a week), did not make any changes in its schedule as yet. We believe that DAL’s current stance may change if the Omicron variant becomes more of a threat and is found in more countries across the globe. Besides, DAL, currently carrying a Zacks Rank #4 (Sell), announced that those among its passengers who need to alter their travel plans (through Dec 31, 2021) may do so without paying any change fees.
The United Airlines like Delta, is also likely to be hit by the U.S. government’s travel restrictions stemming from the detection of the Omicron variant. The United Airlines…