NEW YORK – Shares of airlines and other travel-related companies tumbled Monday after an American Airlines plane crashed in New York, rekindling investors' doubts about the beleaguered industry's ability to recover from the Sept. 11 attacks.
At one point, as fires blazed in a residential area of Queens and a shocked nation watched on television, American Airlines parent AMR Corp. fell more than 14 percent to their lowest level since 1987. AMR ended down 9 percent, or $1.64, to $16.49.
The Airbus A300, a widebody aircraft carrying 246 passengers and nine crew, crashed into Queens, New York, three minutes after takeoff from John F. Kennedy International Airport Monday morning. The flight was bound for Santo Domingo, Dominican Republic. Two of the four jets that were hijacked on Sept. 11 were operated by American Airlines.
The S&P Airline Index fell another 6 percent after dropping 43 percent this year.
Also down sharply were rival UAL Corp, parent of United Airlines, dropping six percent, Delta Air Lines Inc. falling 10 percent and Continental Airlines , down 9 percent.
Major European airlines, already reeling from the Sept. 11 attacks and the global economic slowdown, were forced to delay flights, reroute aircraft, or call some flights back to the airports they had departed from just hours earlier.
The hardest hit shares in Europe were those of EADS, which owns 80 percent of aircraft maker Airbus. EADS was down 9.4 percent. The other Airbus owner, major British defense contractor BAE Systems Plc was little affected, with its shares off 1.5 percent. Rival U.S. manufacturer Boeing Co lost 1.0 percent, while General Electric fell 2.3 percent.
British Airways Plc, the biggest of Europe's carriers and the one most exposed to the U.S. market, led the falls on that side of the Atlantic. Deutsche Lufthansa AG was down 5.6 percent and Air France SA 5.0 percent.
Tough Times Ahead
Stock prices of many major U.S. airlines have been halved or more since the Sept. 11 hijackings of four commercial jetliners which were crashed into the World Trade Center, the Pentagon and a field in rural Pennsylvania, killing more than 4,000 people.
"This is probably the last thing airlines and online travel companies needed. Consumer confidence was shaky to begin with and this is certainly going to put off any recovery,'' said Jupiter Media Metrix analyst Jared Blank.
Airline industry experts said even if the accident was found to have a mechanical cause rather than human malice, it would not reassure an already skittish flying public.
"It's going to be tough sledding for the industry for a very long time,'' said Michael Friedman, an analyst for American Express Financial Services. "It's no longer a matter of price; it's a matter of people feeling safe. If it was an accident, it's still an awfully bad time.''
Hotel stocks also sank on worries the latest plane crash will slam an already suffering travel industry. The S&P hotel index dropped 6.87 percent. Hilton Hotels Corp. lost 51 cents at $8.19, while Marriott International slumped $1.90 to $32.10.
Monday's crash is also likely derail the recovery of online travel firms such as Priceline.com, Expedia Inc. and Travelocity.com Inc. which had begun after the Sept. 11 attacks on the United States, analysts said.
"If anyone was on the fence deciding if they should fly into the holiday season, I think some portion of that is going to be derailed by the crash,'' said Bailey Dalton, analyst at CE Unterberg Towbin."`It's unfortunate because they were starting to hit their stride.''
Many online travel companies reported that bookings had recovered to about 80 percent of pre-Sept. 11 levels as they headed into the Thanksgiving and Christmas holidays. Shares of most of the online travel companies had begun rebounding from lows hit after the jetliner attacks in New York and Washington caused many travelers to stay home, but the Monday crash sent the stocks back into a slump.
Priceline's shares fell 6.9 percent, or 31 cents, to $4.19 on Nasdaq in early-afternoon trading. Expedia slid 3.5 percent, or $1.11, to $30.11.
Shares of Travelocity.com, which some analysts said was most exposed to a decline in air travel, slid 6.5 percent, or $1.01, to $14.55 -- a level not seen since late September.
Reuters and the Associated Press contributed to this report.
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