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Brexit hits US airline, travel stocks
[NEW YORK] Worries that the Brexit vote could curtail travel in Britain and Europe sent airline and travel stocks tumbling on Wall Street Friday.
The vote to pull Britain out of the 28-member European Union raised questions about how the existing free travel regime between the two might change, and affect travelers from both sides and from the rest of the world.
An expected downturn of economic and trade relations between the two sides could also put a damper on travel for business reasons.
At midday, travel websites Expedia and Priceline lost 6.2 per cent and 10.4 per cent, respectively. Hoteliers were battered, with InterContinental Hotels losing 7.5 per cent, Marriott International 4.9 per cent and Hilton Worldwide 5.6 per cent.
And the major US international carriers all sank: American Airlines was the biggest loser, down 7.9 per cent, while United Continental and American Airlines were off between 5.6 per cent and 6.6 per cent.
Those declines compared with a 3.0 per cent drop in the broad-based S&P 500 index.
Britons make about 50 million visits per year to continental Europe, and about 27 million go the other way, said Dan Wasiolek, a Morningstar analyst who covers travel and hotel companies.
For travelers, there is uncertainty as Britain negotiates terms of its departure from the bloc and the European Union tries to fend off possible movements in other countries to quit the union.
"The uncertainty of economic trade between the UK and Europe and now potentially with other countries over the next year or two could create a pause as far as businesses not traveling or investing," Mr Wasiolek said.
"That's typical in periods of uncertainty. People want to gather more information."
Analysts also pointed to currency swings which could also discourage travel to and between some areas.
For more coverage of the EU referendum, visit bt.sg/BrexiT