Airline Stocks Fall As Europe Ends Short-Lived Covid Respite

Airline stocks are down as the European Union recommended Monday that its 27 member states reinstate Covid-related travel restrictions on the U.S. and others.


The EU is halting nonessential travel from the U.S. as Covid-19’s delta variant rips through Florida, Texas and Louisiana. Southern states have the lowest vaccination rates. As a result, hospitals are reeling, as ICU beds fill up and oxygen supply is scarce.

The EU had lifted Covid-related restrictions in June, in time for the busy summer travel season. But the rapid uptick in Covid cases in the U.S. pushed the EU to roll back access to Europe for American travelers. The mandate is nonbinding, so American travelers should check with each nation’s rules before traveling.

Since the U.K. is no longer part of the EU, rules for U.S. travelers to Britain remain the same. The U.S. is on Britain’s “amber” travel list, which means that fully vaccinated U.S. adults don’t have to self-isolate upon arrival in the U.K. However, A COVID-19 test is required three days before arrival in the U.K. and another test is needed two days after arriving.

The reinstated EU restrictions also apply to Kosovo, Israel, Montenegro, Lebanon and North Macedonia. 

Coronavirus travel restrictions to EU member states would include quarantine and testing requirements for unvaccinated travelers from the listed countries.

Airline Stocks

Among airlines with routes to Europe, United Airlines (UAL) fell 3% on the stock market today. UAL stock is trading below its 50-day line, which itself is sloping downward according to MarketSmith chart analysis. 

Airline stocks have weak fundamentals as they struggle to rebound from the pandemic. Even as more flights resumed this summer, boosting sales, costs related to safety and retraining have skyrocketed.

United’s relative strength line is trending downward. Its RS Rating is 22 out of 99. Its EPS Rating is just 15, as it’s posted six straight quarters of losses. UAL trimmed losses to $3.91 per share, while revenue surged 271% to $5.5 billion. 

Rival American Airlines (AAL) stock fell 2.8% to 19.65. AAL dipped below its 200-day line. Its RS Rating is 53, while its EPS Rating is 25. American Airlines trimmed losses in the last quarter and saw sales increase more than 350% to $7.5 billion.

Delta Air Lines (DAL) fell 3% to 40.27, also slipping below its 50-day line. DAL stock has an RS Rating of 24 and an EPS Rating of 17. In the last quarter, Delta narrowed losses to $1.07 and boosted sales 385% to $7.1 billion.

And JetBlue (JBLU), which has some service to Europe, sold off 3.5%.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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