Airlines helped drag the FTSE 100 lower as the UK government put four countries in southern Africa on its travel red list due to an outbreak of a new variant of Coronavirus (COVID-19).
British Airways owner International Consolidated Airlines (LSE:IAG) saw its share price drop 15% and engine maker Rolls-Royce Holdings PLC (LSE:RR.) in early deals on fears the move might lead to bans worldwide on intercontinental travel.
Shares in EasyJet dropped 12% while travel company Tui slumped 10%.
Grant Shapps, the UK Transport Secretary, said the government had taken a ‘safety first’ approach in deciding to place countries in southern Africa on the red list.
Travellers from South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini will have to self-isolate for 10 days and those arriving from Sunday will have to say in a hotel.
All flights from the six countries are being suspended.
No cases of the new variant, known as B.1.1.529, have yet been recorded in the UK, with only 59 cases identified in total so far.
Health Secretary Savid Javid said that even though the number of infections was so far relatively small, the new virus was of “deep concern” to scientists.
“The early indication we have of this variant is it may be more transmissible than the Delta variant and the vaccines that we currently have may be less effective against it.
“Now to be clear, we have not detected any of this new variant in the UK at this point in time. But we’ve always been clear that we will take action to protect the progress that we have made.”
Airlines have been buffeted recently by the new wave of Delta variant COVID-19 infections hitting Europe but intercontinental travel is seen as crucial to the big flagship carriers returning to financial health after the pandemic.
IAG, which as well as British Airways also runs Iberia and Vueling, racked up losses of almost EUR2.5bn in its latest three months on top of heavy deficits throughout the pandemic.
The company had debt at the end of September of EUR12.5bn and would have been banking on transatlantic travel recovering to help reduce this burden, said analysts.