LONDON (Reuters) - European airline stocks plunged as much as 20% on Thursday after U.S. President Donald Trump said he would restrict travel from Europe to the United States for 30 days to try to contain the spread of the coronavirus.
The surprise move is another setback for a sector that has been battered by earlier travel restrictions across the world and has been battling falling passenger volumes due to the virus outbreak, now declared a pandemic.
Credit Suisse analyst Neil Glynn said the transatlantic route was “the primary profit engine” for European airlines.
With 20% to 30% of their passenger revenues coming from that route, Glynn highlighted the damage that would be inflicted in the coming weeks, and potentially well into the summer.
Trump’s move sent shivers through stock markets, with the pan-European STOXX 600 dropping 5%, mainly dragged down by the travel and leisure sector.
Air France KLM shares, which have lost nearly 60% of their value since the coronavirus outbreak reached Europe, dropped another 15% to August 2012 lows.
Germany’s Lufthansa and British Airways and Iberia-owner IAG both fell 9.5%. Cruise operator Carnival plunged to 11-year lows.
Shares in Norwegian Air Shuttle, which operates transatlantic flights, also lost a fifth of their value.
The airline sector has been hit hardest by the outbreak of coronavirus, with falling ticket demand and Italy in lockdown forcing carriers to cancel routes and slash costs to try to survive the mounting crisis.
Airlines stocks lose one-third of their value YTD here
Reporting by Thyagaraju Adinarayan; Editing by Keith Weir and Mark Potter