Salem Radio Network News Wednesday, July 28, 2021

Business

Travel sector sell-off, airlines, cruises, hotels tumble

Air travel in the United States hit another pandemic-era record over the weekend as vacationers jammed airports, but shares of airlines, cruise lines, hotels and almost anything else related to travel tumbled Monday on growing concerns about highly contagious variants of coronavirus.

The Transportation Security Administration said it screened more than 2.2 million people at airport checkpoints on Sunday, the highest number since early March 2020, when the pandemic was beginning to crush travel in the U.S. That topped a record set just two days earlier and was the fourth peak recorded in July.

However, Sunday’s mark was still 18% lower than on the comparable Sunday in 2019, according to the TSA.

Investors weren’t celebrating the latest evidence of a recovery in travel since vaccines against COVID-19 became widely available in the U.S. Stocks were down broadly out of concern over rising infections in many countries, and airline and cruise line stocks were hit especially hard.

Shares of American Airlines, Delta Air Lines and United Airlines tumbled more than 4%, and Southwest was off more than 3% in midday trading. Shares of Boeing, which was just starting to see a recovery in orders for airline jets, fell nearly 5%.

Shares of cruise lines fell to levels last seen before vaccines were available to Americans. Carnival and Norwegian Cruise Line Holdings tumbled more than 5%, and Royal Caribbean was down more than 4%. The hotel sector was hammered too, and shares of Airbnb also slipped.

Airlines say domestic leisure travel is back to pre-pandemic levels, but international travel and business trips both remain sharply lower than in 2019. That is especially bad for American, United and Delta, which get a sizeable chunk of revenue from international and business travel.

Airlines are frustrated that restrictions on international travel haven’t been relaxed more quickly. The rise in coronavirus infections — the U.S. daily rate of new reported cases has more than doubled over the past two weeks, and the World Health Organization says the delta variant is causing cases and deaths from COVID-19 to rise worldwide after a period of decline — could delay moves to make travel easier.

After massive losses last year, airlines are doing better, with more Americans booking flights. Delta reported a second-quarter profit last week, thanks to federal pandemic relief. United, American and Southwest report results this week.

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