Shares of global carriers tumbled on Thursday, after US President Donald Trump imposed restrictions on travelling from Europe in response to the growing coronavirus outbreak, triggering panic among investors.
After bourses in Asia closed with a decrease between two and seven percent, European markets followed suit. Shares in London, Paris and Frankfurt extended earlier losses, as FTSE 100, DAX and CAC 40 dropped from nine to 12 percent respectively.
Major airlines, which had already been facing the financial strain of reduced demand over the Covid-19 outbreak, faced massive losses on Thursday. Air France-KLM stock fell more than eight percent, Lufthansa plunged 12 percent, and International Airlines Group (IAG), which owns British Airways, Iberia, and Vueling among other subsidiaries, was down over 11 percent.
Shares in Norwegian Air Shuttle were one of the worst performers, as they fell more than 25 percent to record lows. Even before Trump announced the travel ban, the company had to cancel about 3,000 flights to meet the change in demand.
Plane makers were not spared from Thursday’s selloff, as Airbus shares dropped more than 12 percent and its American rival Boeing was down around 14 percent. US airlines also faced heavy losses, with United Airlines down 16 percent and Delta sliding around 13 percent.
The steep decline in stock markets came a day after US President Donald Trump ordered a suspension of all travel from Europe to the US territory for 30 days. The restrictions came shortly after the World Health Organization (WHO) announced that the Covid-19 can be characterized as a pandemic.
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