New COVID concerns have hit the markets and airline stocks are feeling the most pain. The emergence of a super-mutant strain in Africa, the “Botswana variant”, has quickly resulted in the European Union and the UK halting flights and issuing travel restrictions to certain African countries. More countries are expected to follow their foot steps to try stop the spread.

Here is the damage so far:

  • British Airways owner, IAG, -14% (largest faller in the FTSE100)
  • Ryanair, -9%
  • Easyjet, -10%
  • Air France-KLM, -8%
  • US airlines are being hit in pre-market trading
  • FTSE100 and Euro Stoxx 50 both -3%

This could be the beginning of a prolonged period of stress as we await further policy updates. We recommend to reduce risk assets across the board.

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