Tuesday night the Center for
Disease Control announced the first case of Ebola in the United States, Dallas
Texas. On Wednesday morning, stocks of all the major U.S airlines dropped
between 2%-4%, just from the first case being announced. The article predicted
if the disease spreads anywhere else all transportation companies are going to
suffer financially. Even though that hasn’t happened yet, stocks have continued to drop for airlines even though they are all having great years so far. Most
airlines were having their stock prices boom in the previous months and the
outbreak of Ebola has stopped that boom. Travel discount sites are also
suffering from this news because people don’t want to travel anymore or even think about traveling. While the
disease hasn’t spread anywhere else in the country it is important to note that
just one case has already affected many companies. If more cases are reported
the country and the economy will hurt together.
This article emphasizes just how easily influenced a company's stock can be based on outside factors. In another article I recently read concerning the first US Ebola case, the Center for Disease Control has been warning hospitals for several weeks that the first US case was only a plane-ride away.
ReplyDeletePerhaps an option could be airlines could create quarantined areas on the plane and charge a nominal fee for passengers willing to not risk it, no matter what stockholders heard the Ebola news and it affected the rate up to a 4% deficit
ReplyDeleteThis article shows how there are so many exogenous factors that plays apart in what happens in our economy. It also show how a lot of things affect each other in big ways;in this case, health affecting transportation.
ReplyDeleteIt's alarming that just one case of Ebola in the US has had such a negative effect on airline stocks. I wonder how great of an impact it will have on transportation companies and the prices of airline tickets if more cases continue to develop in the United States. Hopefully the virus can be contained before the impact it has on the economy becomes more severe.
ReplyDeleteLooking at all the facts, it's not surprising that airline companies have been effected by the outbreak of Ebola. It just comes to show that there are outside factors, that are out of our influence and unpredictable, that can influence things as inelastic as airplane travel.
ReplyDeleteI think it will be interesting to see if stocks continue to drop once Americans become more educated and informed about the disease. I wonder if when more Americans recognize that the disease is spread through bodily fluids and not the air, stocks will stop dropping.
ReplyDeleteThe stock market is easily influenced. With this drop in stock just because of 1 case of Ebola, I am interested to see the affect on the stock market if anymore cases are introduced. It is crazy to think that this will not only effect airlines either, it will effect the entire transportation industry.
ReplyDeleteAlthough the stock prices have suddenly dropped, they will recover to pre-ebola outbreak levels. The market is easily influenced and frequently overreacts to headlines. If there remains value in this industry (which there definitely will be) stock prices will recover.
ReplyDeleteThe drop is just from people panicking and taking precautionary measures. It is terrifying that this devastating disease is in our country and the idea of there being an outbreak will cause many industries to suffer. As we learn in many economics courses one little change effects a magnitude of outputs at different levels. I agree it will be interesting to see what other markets will suffer and how the markets will adjust based on further reporting of the Ebola cases.
ReplyDeleteThe Ebola case may have serious economic implications in the near future. Similar to any disease, Ebola has the potential to be affect peoples health and personal finance. The stock drops from airlines seems to be a preventative measure so that the disease won't spread. As long as the Ebola case is contained, the stock prices for airlines should make a recovery by the end of the year. Most of the airlines had been performing exceptionally for most of 2014, so it is not unlikely to for them to bounce back strong.
ReplyDeleteThe tumbling stock prices are no surprise as headlines often influence the market positively and negatively time to time. Yesterday, the White House announced a ban on travel from West Africa will impede Ebola in the states. The main issue here is whether more cases surface in the United States or not. If so, we will see even more detrimental damage done to several companies. It will be interesting to keep awareness of this ongoing issue and how the government will react to ultimately solve this case.
ReplyDeleteI am not surprised that the airline industry has taken a slight hit due to the Ebola virus. Airports have so much traffic that people are afraid to travel thinking that they may come in contact with the virus if they travel through air. I think Americans may be panicking a little more than we need to due to the fact that we have such good medical precautions and are going to contain the virus much more efficiently than other countries.
ReplyDeleteThe Ebola scare is a bit ridiculous, and while the fact that it's having an influence on the economy is unsurprising, it kind of goes to show what a lack of education and the media can do to an industry. The virus only spreads through contact with the bodily fluids of an infected person and is not going to become an airborne pathogen (at least one of the comments mentions this and if people continue to honestly believe this, it could effect airlines' rates even more). It's rather saddening.
ReplyDeleteIt is indeed a prime example of how a particular industry can be impacted by a singular event. In terms of the stocks dropping they should be crawling back to as they were once the panic phase of the consumers goes down ( which seems to be an overreaction as stated by previous commentators ).
ReplyDeleteEven though there has only been one case of Ebola reported in the United States, people are still nervous about the disease. People will always be nervous or cautious about deadly diseases. It makes perfect sense that the stock prices of airlines decreased. I expect it to continue to decrease in the future, until the Ebola outbreak is under control.
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