United Paces Airline Stock Slump Amid Ebola Concern

Airline shares declined the most in almost three months after U.S. health officials reported that the nation’s first confirmed Ebola patient flew to Dallas from Liberia.

“That’s pressuring airline stocks a little bit,” Joe Denardi, a Stifel Financial Corp. analyst in Baltimore, said today in an interview. “The worse the news headlines get about this, the more risk there is to airlines.”

U.S. carriers operate only a handful of flights to Africa, where the Ebola virus outbreak is concentrated. Any potential financial threat to the domestic industry would occur only if passengers back off flying for fear of exposure to the disease, similar to what happened with severe acute respiratory syndrome in 2003, Denardi said.

The Bloomberg U.S. Airlines Index fell 3.2 percent, the largest one-day drop since July 7. Southwest Airlines Co. slid 3.6 percent to $32.55 at the close in New York, while Delta Air Lines Inc. slumped 3.5 percent to $34.90. All 11 carriers in the gauge declined.

The victim’s path to Dallas hasn’t been made public. No airlines serve Africa from Dallas/Fort Worth International Airport, the main domestic and foreign gateway to North Texas, and none of the major U.S. carriers with overseas networks -- American Airlines Group Inc., United Continental Holdings Inc. and Delta -- flies to Liberia. Atlanta-based Delta suspended operations last month in Monrovia, the country’s capital.

Momentum Fades

Airline shares rose on only nine days during September, and positive momentum that had been supporting the stocks “has gone away” with fare weakness in international markets, said Hunter Keay, a Wolfe Research & Co. analyst in New York.

It is “completely irrational” for investors or U.S. airline passengers to worry about the spread of Ebola, which is largely isolated to west Africa, Keay said in an interview. “There is really no clear direct threat as it relates to U.S. airlines.”

The Dallas Ebola patient traveled to the U.S. from Liberia through Brussels, according to Gregory Taylor, Canada’s chief public health officer. Taylor told reporters in Banff, Alberta, that it’s unclear whether the traveler made other stops in the U.S. or elsewhere on his way to Dallas.

While Brussels Airlines NV offers the only service between the Belgian capital and Monrovia, the carrier doesn’t know whether the man was a passenger, said Wencke Lemmes, a spokesman.

“There is no contamination risk as the patient has only developed symptoms several days after his arrival in the U.S.,” Lemmes said by e-mail. “This means that if ever this person would have been on board of our flight, what we cannot exclude but not confirm either, there has never been a risk of contamination.”

The patient, whose name hasn’t been released, is being kept in isolation in an intensive care unit at Texas Health Presbyterian Hospital. He is in serious but stable condition today, a hospital official said.

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