How did the Market react?
The S&P 500 (SPY) closed almost flat on March 22. It recovered after an initial sell-off following the terror attack in Brussels. It’s typical for markets to react negatively due to the uncertainty of the event. They recover once more clarity emerges. The Dow Jones U.S. Travel & Leisure Index (DJUSCG) fell by 0.7%. The NYSE Arca Airline Index (XAL) also fell by 0.9%. The iShares Dow Jones Transportation ETF (IYT) fell by 0.74%.
Asian markets fared better with prospects of a bright global economy outweighing the impact of the attacks.
Online travel agencies are impacted the most
TripAdvisor (TRIP) and Priceline (PCLN) lost the most. TripAdvisor fell 2.5% and Priceline fell 2.3%. Both of these players have significant exposure to Europe. TripAdvisor derives 32% of its revenue from Europe. Priceline is estimated to derive almost 50% of its revenue from the region.
All airlines are impacted
Although the financial impact will mostly be restricted to legacy carriers Delta Air Lines (DAL), American Airlines (AAL), and United Continental (UAL), as we discussed in the previous part, airlines fell across the board on March 22.
Spirit Airlines (SAVE) recorded the highest decline among airlines. It fell by 2.9%. It was followed by American Airlines at -1.6% and United Continental at 1.1%. Southwest Airlines (LUV) fell by 0.8%. Alaska Air Group (ALK) and JetBlue Airways (JBLU) fell by 0.2%.