The Standard & Poor’s 500 airline index dropped 3.8% combined on Monday and Tuesday, five times the 0.7% drop in the S&P 500 as President Donald Trump’s travel ban wiped in two days $4.9 billion in market value for the country’s biggest airlines;
American Airlines Group Inc., leading the industry group with a 5.8% decline. Doug Parker, American’s chief executive officer, said in a letter to employees, “Crews, reservations agents and airport teams have witnessed turmoil in our airports that shows how divisive this order can be. It is the current law of the US, and so long as that is the case, we must comply.”
The developments hold several concerns for investors as well; one is that these restrictions would expand or that higher costs will occur for carriers to enforce the rules. While it’s hard to quantify, there’s also a risk that some people will forgo travel to the US.
IATA, asked the US government for clarification. Trump’s executive order “placed additional burdens on airlines to comply with unclear requirements, to bear implementation costs and to face potential penalties for non-compliance,” the group said in an official statement this week.