Travel-sector stocks fall on China bird flu outbreak

Travel-sector stocks fell in early Friday trading as fears were raised that a bird flu outbreak in China would stifle air travel demand.

Shares in Chinese airlines declined the most in nearly four years following news six people died of the H7N9 bird flu virus.

The deaths accounted for more than a third of the 14 confirmed human infection cases in the country. Most of those affected were on the eastern coast near Shanghai which sparked a mass slaughter of poultry.

Reports of the outbreak sent Hong Kong-listed shares of airlines tumbling, namely Guangzhou-based China Southern Airlines.

The benchmark Hang Seng Index was down 2.5% at 21,786.

Europe stocks also declined with the STOXX Europe 600 Travel and Leisure index down 1.62%.

Low-cost European airline easyJet was among the fallers despite an in-line trading update and a positive outlook from Investec which raised its rating from 'hold' to 'buy'.

International Consolidated Airlines (IAG) also dropped as it was dragged down further by its announcement Wednesday that the number of premium passengers flying with its British Airways and Iberia airlines fell 2.0% last month.

The company blamed the early timing of Easter and strikes at the Spanish carrier.

Iberia cabin crew and ground employees' unions went on strike for five days in March as jobs losses were threatened at the loss-making airline.

The carrier operated about 64% of its flights during the month. It impacted the group total by about 0.8%.

Non-premium traffic increased by a marginal 0.5% in the month.

Group traffic measured in revenue passenger kilometres increased by 0.1% year-on-year while group capacity measured in available seat kilometres was down 1.1%.

Underlying market conditions remain unchanged from those described at the publication of fourth quarter results in February, IAG said.

RD