Airline Industry: European Airlines Decline as Bird Flu Concerns Spread From Asia - by Robert Wall and Andrea Rothman

European aviation stocks declined, following a drop among Asian carriers, on concern an outbreak of the bird-flu virus in China will clip travel and hurt demand already unsettled by rising military tensions with North Korea. 

Air France-KLM (AF), Europe’s biggest airline, fell as much as 4.9 percent in Paris trading, while Deutsche Lufthansa AG (LHA) declined as much as 5.8 percent in Frankfurt and British Airways (IAG) parent IAG lost 5.2 percent in London. The drop spilled over to European low-cost carriers that don’t serve global routes, with Ryanair Holdings Plc (RYA) falling 3.4 percent in Dublin and Easyjet Plc (EZJ) retreating 5.1 percent, the most in a year.

“The airline weakness is down to bird flu and more general concerns over issues such North Korea,” James Hollins, a London-based analyst at Investec said today. “There is a fear these potential crises could curtail travel.”

European airlines followed a retreat among Chinese stocks after at least six people died from the new strain of bird flu that emerged in eastern China. Previous bird flu outbreaks and the occurrence of severe acute respiratory syndrome, or SARS, had emptied planes and caused industry-wide losses.
 
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