Cruise and airline stocks sell off as global health officials track new coronavirus variant with 'large number of mutations'

Cruise and airline stocks sell off as global health officials track new coronavirus variant with 'large number of mutations'
Travelers at LAX airport in December 2020Ringo Chiu/Shutterstock
  • Airline and cruise line stocks were slammed down Friday with the emergence of a new coronavirus variant.
  • The EU, the UK, and Japan placed travel restrictions from South Africa where the B.1.1.529 strain was first identified.

Shares of cruise lines and airlines sharply fell Friday as a new coronavirus strain spurred a round of travel restrictions and cautions worldwide.

United Air Lines dropped 8.6% in premarket trading Delta Air Lines gave up 7.8% and American Airlines lost 7.6%. Planemaker Boeing was also hit hard, down by nearly 7%.

Meanwhile, shares of Norwegian Cruise Line Holdings and Royal Caribbean Cruises each sank 9% and Carnival slumped by 10%.

The World Health Organization on Friday held a special meeting about a new variant of coronavirus called B.1.1.529 which has been identified in South Africa as driving up new cases.

The European Union, the UK, Japan and other countries have issued put a range of travel restrictions from South Africa as well as from neighboring countries into place, sending travel stocks sliding.


"We don't know very much about this yet. What we do know is that this variant has a large number of mutations. And the concern is that when you have so many mutations, it can have an impact on how the virus behaves," said Dr. Maria Van Kerkhove, the technical lead on COVID-19 at the World Health Organization in a live streamed update.

"We are proposing, in close coordination with EU countries, to activate the emergency brake mechanism to stop air travel from the Southern African region due to the new COVID-19 variant of concern B.1.1.529," the EU Commission said on Friday.

News of the potentially more infectious and vaccine-resistant strain of coronavirus follows increasing worries about a sharp rise of infections in Europe, said Rupert Thompson, chief investment officer at wealth management group Kingswood in a note.

"Covid is once again top of mind for markets. The extent of the threat posed by this new variant is far from clear and equities are likely to remain skittish until there is further clarity on this which may not be for a few weeks," he said.

Global stock markets dropped Friday as investors fled out of riskier assets and into havens such as gold. The South African rand fell to a one-year low.