Travel stocks fall as Omicron spurs mass flight cancellations for fourth day
Reuters
Published Dec 27, 2021 07:57AM ET
Updated Dec 27, 2021 03:01PM ET
By Aishwarya Nair and Abhijith Ganapavaram
(Reuters) -Shares of U.S. airlines and other travel-related companies fell on Monday as rising Omicron cases and weather-related problems forced the cancellation of hundreds more flights, leaving travelers stranded across the country during the holidays.
Over 1,000 flights were canceled within, into, or out of the United States on Monday, data from flight-tracking website FlightAware.com showed. Globally, more than 2,600 flights were scrapped.
That was on top of over 3,000 U.S. flight cancellations during the Christmas holiday weekend, typically a peak time for travel for Americans.
Shares of American Airlines (NASDAQ:AAL) Group Inc, United Airlines Holdings (NASDAQ:UAL) Inc and Delta Air Lines Inc (NYSE:DAL) were down about 1% in afternoon trade. Southwest Airlines (NYSE:LUV) Co's shares recovered losses to trade about flat.
Most airline stocks have rallied this year on hopes of a travel boom as travelers start visiting friends and family after dealing with pandemic-related restrictions last year.
However, staff shortages at airlines, weather-related disruptions and now the fast-spreading Omicron variant have disrupted flights frequently this year.
As long as the Omicron variant continues to infect people who are vaccinated and quarantine restrictions remain in place, air travel is expected to be hit by staffing shortages, research firm Third Bridge Group's Peter McNally said.
Southwest Airlines said it had canceled about 50 of the 3,600 flights scheduled Monday due to weather-related problems. United Airlines said it had called off 115 of the 4,000 flights that were scheduled, while Delta expects to cancel over 200 of 4,166 its scheduled flights.
American Airlines pointed to its statement on Saturday that said the carrier had to cancel flights due to "COVID-related sick calls".
Separately, the Shanghai government said on Monday that the country's aviation regulator would suspend two China Eastern Airlines (NYSE:CEA) Corp Ltd flights from New York to Shanghai from Jan. 3 due to rising COVID-19 cases.
Other travel stocks also came under pressure as Omicron triggers fears of tougher restrictions.
The U.S. Centers for Disease Control and Prevention said on Monday it was investigating nearly 70 cruise ships after reports of COVID-19 cases on board.
Carnival (NYSE:CUK) Corp said it had isolated a small number of passengers on board its Carnival Freedom cruise ship due to positive COVID-19 test results. All passengers from the cruise trip disembarked on Sunday, and the ship departed Monday afternoon on its next planned voyage, it added.
Shares of Carnival were down 1.1%, while its peers Norwegian Cruise Line (NYSE:NCLH) Holdings and Royal Caribbean (NYSE:RCL) Cruises Ltd were down about 2%.
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Travel firms Expedia (NASDAQ:EXPE) Group Inc and Tripadvisor Inc fell between 1% and 1.6%.
Vacation rental firm Airbnb Inc , hotel operators Marriott International (NASDAQ:MAR) Inc and Hilton Worldwide Holdings (NYSE:HLT) Inc all recovered losses to trade about flat in the afternoon.
Written By: Reuters
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