LONDON (AP) - Shares of airlines and travel companies dropped sharply Thursday after British authorities reported they thwarted a terrorist plot to blow up several aircraft in flight between the United States and the Britain. As heightened security measures caused long delays and canceled flights at airports around Europe and the United States experts said the alert could be a severe blow to both industries.
"You will always see a selloff based on the headlines today, but investors and analysts will now be waiting to see the depth of issues," said Henk Potts, equity strategist at Barclays Stockbrokers.
The plot had targeted United Airlines, American Airlines and Continental Airlines, according to two U.S. counterterrorism officials.
Shares of U.S. airlines were hit hard in pre-market trading. American Airlines parent AMR Corp.'s stock fell 69 cents, or 3.4 percent, to $19.60. Shares of UAL Corp., the parent of United Airlines, fell $1.80, or 7.6 percent, to $22.03. Continental Airlines Inc. fell $1.51, or 6.2 percent, to $22.70.
United Airlines flights from London to the United States are expected to operate about two and a half hours late, said spokesperson Robin Urbanski. United hasn't cancelled any flights. American Airlines spokesman John Hotard said at least one London-bound flight from Chicago has been canceled Thursday morning. He said a later flight from London to Chicago has also been canceled.
The news sent European stocks down across the board, with major indexes in Britain, France and Germany each off more than 1 percent.
British Airways PLC was one of the hardest hit European airlines because of its heavy exposure to the trans-Atlantic route. Its shares fell 3.9 percent to 374.50 pence ($7.15) in trading on the London Stock Exchange.
BA said it was experiencing severe operational delays Thursday and it was likely some flights would be canceled. It said people choosing not to travel Thursday would get a refund.
Budget airline easyJet PLC fell 2.6 percent to 411.75 pence ($7.84) while fellow low-cost carrier Ryanair Holdings PLC was down nearly 2.8 percent to 7.32 euros ($9.41).
The new security measures banning all hand luggage from all flights leaving the U.K. posed a logistical problem for Ryanair, which this year began charging customers for each bag they checked—a policy that has swelled the volume of luggage carried on board their aircraft.
Among other airlines, Air France-KLM was down 2.8 percent to 19.19 euros ($24.68) in Paris, while Lufthansa was down 3.2 percent at 14.16 euros ($18.21) in Frankfurt.
The ban on hand luggage will also likely to hurt some retailers, who run tax-free franchises at airports. Retail operations are a major source of income for the airport operators like Ferrovial's BAA PLC. However, BAA was up marginally, 0.3 percent, at 936 pence ($17.88).
