Shares in European airlines plummeted on Monday in a sign investors believe the continent could soon be hit by a major travel crackdown. Budget British carrier easyJet dropped by 16 per cent, Irish airline Ryanair fell nearly 14 per cent and Air France was down about 9 per cent. More than 50,000 people are locked down in about a dozen Italian villages where the most deaths and infections have been recorded. Schools, shops and offices are closed and armed police are threatening to arrest and detain anyone who attempts to leave the quarantine zone. A man buys supplies of bottled water in Milan, Italy. Credit:Bloomberg Panic is taking hold in the nearby city of Milan, the engine room of Italy’s economy, home to 1.3 million people and the nation’s world-renowned fashion industry. Worried residents have emptied shelves in a number of supermarkets, although supplies were still available in most stores in the city’s historic centre. “I do not want to be caught out. I want to be ready because this situation could get very bad,” said Angela Borghese, a cleaner from Milan who purchased 30 litres of water from a convenience store.

Schools, government offices, cinemas and some banks were also closed in Milan, while police in the nearby village of Binasco warned that con-artists were pretending to be paramedics and visiting houses to carry out free swabs only to rob people once inside. The spike in the death toll in northern Italy triggered investor nerves around the world. Italy’s FTSE MIB was down nearly 6 per cent on Monday and there were substantial falls on the Dow Jones, S&P 500, the UK’s FTSE and France’s CAC. Commuters ride a deserted tram carriage in Milan. Credit:Bloomberg Austria is particularly nervous about the outbreak spreading across the border. Vienna temporarily suspended train services to and from Italy on Sunday night over fears a train travelling from Venice to Munich could have contained infected passengers. The tests were negative but the Austrian government has not ruled out imposing border controls over the coming days.

Italy and Austria are signatories to the so-called Schengen Agreement, which eliminates the need for border checks between European nations, but governments are permitted to introduce controls provided there is a serious threat to public policy or internal security. Italian Prime Minister Giuseppe Conte held an extraordinary cabinet meeting in Rome on Monday where ministers discussed the idea of suspending the agreement. Loading Replay Replay video Play video Play video “The discussion showed that although there is legal viability, there is no practical sustainability for such a suspension,” said a spokesperson for the Department of Civil Protection after the meeting. The government has asked for an urgent meeting with ministers from neighbouring countries to co-ordinate the response to the outbreak. Ireland has told its citizens to avoid travelling to the affected Italian towns of Codogno, Castiglione d’Adda, Casalpusterlengo, Fombio, Maleo, Somaglia, Bertonico, Terranova dei Passerini, Castelgerundo and San Fiorano. Australia’s Department of Foreign Affairs and Trade updated its travel advice for Italy overnight but has not warned against travelling to the country.

Loading Passengers arriving at and leaving from Milan’s two main airports are being subjected to temperature screening. Italian media also reported on Monday afternoon that the government had capacity for 3000 beds for new patients at military installations across the country. World Health Organisation director general Tedros Adhanom Ghebreyesus said the coronavirus had likely peaked in China but described the spike in cases in Italy, South Korea and Iran as “deeply concerning”. “There’s a lot of speculation about whether these increases mean that this epidemic has now become a pandemic,” he said.