U.S. airline stocks fall as new COVID-19 strain fuels travel ban fears

[December 21, 2020]  (Reuters) - Shares of U.S. airlines tumbled in premarket trading on Monday as a new fast-spreading COVID-19 strain in Britain renewed fears of widespread travel bans, with many countries barring flights from the United Kingdom ahead of the peak holiday season.

A Delta Air Lines Airbus A350-900 plane takes off from Sydney Airport in Sydney, Australia, October 28, 2020. REUTERS/Loren Elliott

The news comes when U.S. carriers are burning $180 million in cash daily as passenger volumes remain down nearly 70% from year earlier levels due to the restrictions triggered by the pandemic.

Shares of Delta Air Lines shed about 7%, while those of American Airlines and United Airlines fell about 6%. Southwest Airlines dropped about 5% in premarket trading.

The new strain, said to be up to 70% more transmissible than the original, has prompted Canada, Germany, Italy and the Netherlands to suspend flights from Britain, while France has also barred freight carriers.

Investors also shrugged off the $15 billion in new payroll assistance for U.S. airlines, expected to be finalised on Monday, as part of a new coronavirus aid.

Shares of other U.S. travel companies too were lower on Monday.

(Reporting by Rachit Vats in Bengaluru; Editing by Sriraj Kalluvila)

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