The stock of air transportation company United Airlines (UAL) has plunged in price over the past month as another highly-contagious coronavirus strain has emerged to menace the world’s population. Given the threat of new travel restrictions now looming over the airline industry, and UAL's negative profit margins, is it worth adding the stock to one's portfolio? Let's find out.Chicago-based United Airlines Holdings Inc. (NASDAQ:UAL), through its subsidiaries, offers air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. The company transports people and cargo through its mainline and regional fleets.
UAL's shares have declined 22.7% in price over the past six months and 16.5% over the past month due to the rising fears surrounding the newly discovered COVID-19 omicron variant. Governments worldwide are imposing tight guidelines, new lockdown measures, and travel restrictions to curb the spread of the new variant. This, in turn, is affecting the already struggling aviation industry.
While the industry was making its way steadily out of its pandemic blues, the new COVID-19 variant has threatened to stifle its comeback. In addition, UAL's poor profitability could further raise investors' concerns about the stock’s prospects and cause its share price to decline in the near term.