LONDON — Airline shares dropped on Friday after European governments announced further travel restrictions to fight growing Covid infection rates and highly-infectious variants.

European leaders agreed on Thursday to keep their borders open but to discourage any non-essential travel. This means citizens looking to move from areas where the virus is circulating at a very high level will be asked to have a negative test and undergo quarantine upon arrival at another member state.

France has already said that from Sunday it will require citizens coming from other EU countries to have had a negative PCR test 72 hours before departure.

“We are fully convinced that we must keep borders open in order to keep the internal market functioning, but at the same time we are also convinced that restrictions should be possible to implement for non-essential travels,” European Council President Charles Michel, who chairs meetings among the 27 EU leaders, said on Thursday evening.

These restrictions to travel are a challenge for the EU given its policy of free movement, where citizens, goods and services move freely from one country to the other. However, this approach has been severely hit by the pandemic, which is then reflected on how the traveling sector performs.

IAG, the owner of Iberia and British Airways, sank almost 4% on Friday. Lufthansa also dropped around 3%. Easyjet fell more than 4%.

The entire travel and leisure sector in Europe was down 2.8% during European lunchtime trading hours.

Earlier this month, the International Air Transport Association (IATA) said air passenger numbers stalled at the end of 2020.

Passenger traffic growth dropped by 70.3% year-on-year in November, the IATA said, with Europe being “the most severely impacted region due to strict containment measures.”

Rising coronavirus infection rates, and the accompanying wave of lockdowns across Europe, should prompt managers to spend more time considering their employees’ mental health, according to the CEO of staffing group Adecco. 

“Especially with … the second wave of lockdowns coming in, we need more emotionally intelligent leaders, because we see that many people are suffering,” Alain Dehaze told CNBC’s “Squawk Box Europe” on Monday.

Countries including the U.K., the Netherlands, Germany, Austria and France are currently in lockdown or have extended restrictions, with some expected to last beyond the end of the month. Lockdowns were first implemented last year when the coronavirus pandemic hit the region in early 2020, and have been reinstated as virus infection rates have risen during fall and winter.

Workers have reported worsening mental health during the coronavirus pandemic, according to an Adecco-commissioned survey of 8,000 office-based staff in eight countries, Dehaze added. 

“We have seen in our survey that 28% of employees … say their mental health got worse during the pandemic, and that only one in 10 managers exceeded employees’ expectations in supporting them. This soft skill will be extremely important to make sure that in this new world, managers and leaders are taking care of their people in the right way,” he said.

Adecco expects permanent, white-collar jobs to decline this year, such as payroll workers, with more of a focus on temporary roles.

“Employers have the challenge to have the right talent at the right time … but unfortunately, for some of them, [the pandemic] means they will have to lay off people and then it will be very important that government but also employers and individuals are investing in reskilling and upskilling themselves to remain competitive.”

Employees want to spend around half of their working time in the office and half at home (once restrictions are lifted), according to Adecco’s survey. “Human interactions are still valued. And these figures of 50-50 really transcends geography, generation, parental status. So, it’s really a kind of new universal ideal,” Dehaze said.

“Hybrid work is here to stay … it creates (a) more inclusive workplace, especially for people with disabilities, or working parents.”

Adecco’s revenue was down 28% in the second quarter of 2020 and it fell 15% in its third quarter and Dehaze said he expects its revenue to continue to improve as lockdowns become less restrictive. “Governments have learned from this first lockdown not to close everything and keep the economy going and protect the labor employment by doing ‘intelligent’ lockdown(s).”