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Coronavirus: easyJet leads the airline retreat after Italy goes into lock-down mode

The fear stalking the likes of Ryanair, off 11%, Wizz Air, down 9%, and easyJet is that the industry could be paralysed if infection rates across the continent pick up

Ryanair Holdings plc -

Shares in the international and budget airlines were left grounded by fears the coronavirus outbreak is morphing into a pandemic threat to travel.

Worst affected was easyJet, which saw 11.4%, or £680mln wiped from its value after Italy went into lock-down mode as it tried to contain the spread of the flu-like illness.

With 152 cases, it is the worst affected country in the EU, though there are reports that neighbours such as Austria may be ready to close their borders.

9% of traffic 

Italy itself is responsible 9% of air travel in the European Economic Area – in other words it is an important destination for the low-cost firms already grappling with fleet problems associated with Boeing’s 737 Max.

The fear stalking the likes of Ryanair (LON:RYA), off 11%, Wizz Air (LON:WIZZ), down 9%, and easyJet is that the industry could be paralysed if infection rates across the continent pick up.

IATA, the airline body, estimated international carriers had already lost US$29.3bn in revenues, with worst affected being the Asia-Pacific long-haul companies, taking US$27.8bn of that hit.

By February 20 the rest of the world – US, European and Gulf airlines – had essentially escaped scot-free, with a US$1.5bn hit

Costs rising daily 

“We expect [that figure] to rise with the spread of the virus to Italy, with demand for travel from North America likely to soften, which would hit IAG in particular as it is heavily reliant of trans-Atlantic routes,” said City broker Peel Hunt in a note to clients.

Shares in British Airways owner IAG (LON:IAG) reflected this lingering worry, descending 7.2% in a bloody session.

Also under pressure were travel firm TUI (LON:TUI), down 7.6%, and cruise giant Carnival (LON:CCL), which lost 6.9% of its value as the FTSE 100 tanked 257 points to 7,146.76.

Quick facts: Ryanair Holdings plc

Price: 11.255 EUR

LSE:RYA
Market: LSE
Market Cap: €12.26 billion
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