DAL Delta Air Lines Inc

   By Maria Armental 
 

Airline stocks were among the biggest gainers Friday on speculation the Trump Administration may step in with an stimulus package to stem financial losses tied to the coronavirus epidemic.

White House economic adviser Larry Kudlow said the administration was considering "timely and targeted" measures to help workers and sectors affected by the outbreak and related market swings.

"People who may be stranded at home and will lose pay, we want to help them," Mr. Kudlow told Fox Business Network. He said the administration might seek to aid small businesses "with some cash flow" and that larger-scale sectors "might need some temporary assistance."

Airline stocks were some of the most battered by the outbreak as companies imposed travel restrictions on workers and people postponed or cancelled trips.

Canaccord Genuity analyst Ken Herbert said on Friday that the impact on airline profitability "appears to be worsening by the day.

"It now appears that the models based on the SARS pandemic are too conservative, and we use as a base case for our analysis a 5% drop in passenger traffic in 2020," Mr. Herbert wrote in a note Friday. "While it is likely the industry will see a V-shaped recovery in the impacted regions (in fact manufacturing activity in most of China appears to be recovering), the geographic impact of the virus is much greater than any of the prior examples."

The International Air Transport Association most recently estimated global revenue losses this year for passenger carriers of $63 billion to $113 billion. IATA previously estimated $29.3 billion in lost revenues based on an assumption that the impact would be largely confined to markets associated with China, where health officials believe the epidemic originated.

"In little over two months, the industry's prospects in much of the world have taken a dramatic turn for the worse," IATA Chief Executive Alexandre de Juniac said in a statement. "It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis."

"As governments look to stimulus measures," Mr. de Juniac wrote, "the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times."

American Airlines Group Inc. shares rose 1.3% to $16.25; Delta Air Lines Inc. increased 1.7% to $45.79; United Airlines Holdings Inc. climbed 4.3% to $53.78; Hawaiian Holdings Inc. advanced 6% to $17.83; and Alaska Air Group Inc. gained 4.8% to $45.55.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

March 06, 2020 12:40 ET (17:40 GMT)

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