Airline stocks push FTSE 100 back into the red as coronavirus fears mount
Airline stocks continued to plunge this morning as more flights were suspended on the back of growing fears over the spread of the coronavirus outbreak.
British Airways owner IAG was the FTSE 100’s biggest faller, shedding another nine per cent this morning to land at 426.20.
The fall means that since 23 February IAG has lost almost 200p, as its major brands British Airways and Iberia both cancelled flights to China until April at the earliest.
On Friday the group said that it was impossible to predict the impact that the virus would have on its financial performance in 2020.
Other airlines also weighed on London’s premier index, which swiftly pared its gains after a brief rally this morning.
Tour operator Tui, which is at risk of relegation from the blue-chip bourse, fell over 2.8 per cent, while Easyjet dropped four per cent.
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The budget airline also announced on Friday that it would cut services from northern Italy after a surge in cases in the country, where 34 people have now died from the illness.
Irish airline Ryanair also saw a five per cent drop this morning, while Hungarian carrier Wizz Air also saw a slide of over four per cent.
The global aviation industry has been one of the sectors that has been worse impacted by the outbreak, as spooked passengers decide against flying over fears of contracting the illness.
CMC Markets chief analyst Michael Hewson said that the performance of travel stocks would be crucial in any markets rally, but that at the moment, no rebound was apparent.
Earlier this month global aviation body the International Air Transport Association (IATA) said that the outbreak will cost the world’s airlines a combined $29.3bn in revenue, a reduction of five per cent on December’s estimates.
IATA said that the vast majority of the cost – $27.8bn – will be borne by carriers based in the Asia-Pacific, with Chinese domestic airlines losing $12.8bn alone.