Airline Stocks Slump As US Demands Negative Covid Test From China Travelers

Passengers flying from China will need a negative Covid test before entering the United States, health officials indicated Wednesday.

U.S. airline stocks slumped lower Wednesday following an updated from health officials that indicated travelers from China will need a negative Covid test before entering the United States.

The new testing requirements, set to take effect on January 5, will include travelers directly from China as well as those who visited the country ten days before their departure to the United States. Health officials will require either a negative antigen or PCR test, according to reporters briefed by the government. 

China, which began relaxing many of its "Covid Zero" health policies in November, has loosen nearly all of its restrictions over the past week, including quarantine requirements for foreign travelers. Hong Kong followed suit Wednesday in scrapping PCR tests for new arrivals while ending limits on public gatherings and other business restrictions put in place during this year's surge in infections.

The gradual, yet definitive steps towards a reopened China economy have boosted commodities prices and lifted investor sentiment heading into the final trading days of the year, although concerns over the pace of new infections, and the ability of China's health authorities to contain them continue to unsettle observers.

China's top health authority estimated earlier this week that infections may be spreading at a rate of 1 to 2 million people a day,  

U.S. airline stocks were moving sharply lower following the travel policy update, with American Airlines AAL falling 1.8% to $12.30 each and Delta Air Lines DAL down 2.55% at $32.06 each. United Airlines UAL was marked 2.25% lower at $37.38 each.