Airline shares hit by fears over SARS-like virus

Airline shares hit by fears over SARS-like virus

Concern about the potential threat posed to the airline industry by a SARS-like virus hit shares in International Airlines Group yesterday.

The British Airways and Iberia owner was the second-heaviest faller on the FTSE 100.

Shares fell as much as 4.6% before finishing down 5.2, or 1.9%, at 270.7p.

EasyJet shares dropped by 11p to £11.42 amid market anxiety that the outbreak of the coronavirus may deter travellers, the Daily Telegraph reported.

The World Health Organisation said on Sunday that it is probable that the virus, which is from the same family as SARS and has already caused at least 18 deaths, is being spread by close contact between humans.

France confirmed its second diagnosis of the virus, which first came to light last year and originates from the Gulf region.

“We think a more developed outbreak could significantly hit short-term travel demand as travellers’ perception of risk rises,” RBC Capital Markets analyst Damian Brewer told the newspaper.

“While in the short term, airlines can cut flights – and avoid operating costs – any sustained dent in travel demand could also diminish cash flows and increase financial stress risk.”


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