Over £2billion wiped off the value of UK travel and airline firms after travel list update dashes holiday hopes
MORE than £2 billion has been wiped off the value of UK-listed travel and airline firms after the travel list update dashed hopes of foreign holidays.
EasyJet, British Airways owner IAG, Ryanair, TUI, Wizz Air and engine maker Rolls-Royce all suffered heavy falls as news spread that no more countries would be added to the Government’s green list.
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The decision was confirmed once the stock market closed, but the rumours were enough to shave hundreds of millions off the value of the airlines.
Thousands of Brits had their travel plans sent up in smoke by the government advising Brits not to travel to Portugal and making returning passengers self-isolate from 4am on Tuesday.
The country was today relegated to Britain’s amber list after ministers sounded the alarm about a worrying new “Nepal mutation” of the Indian variant detected in the holiday hotspot.
Meanwhile, no countries are being added to the green list in a further gut punch for Brits aching for a post-pandemic getaway, meaning the list of potential destinations is limited to a handful of places like Gibraltar and the Falkland Islands.
Seven countries were also escalated to the red list where travel is banned for all but returning Brits.
The latest changes have wreaked havoc on holidaymakers’ plans, but have also further savaged the tourism sector.
It has been one of the hardest hit since the start of the pandemic and has seen companies tapping up investors for funds and borrowing heavily through Government-backed schemes.
Many had hoped the reopening of holiday hotspots could see an improvement in the firms’ fortunes, but Thursday’s latest guidance snuffed out those hopes.
IAG saw shares close down 5.4 per cent – wiping nearly £550 million off its value.
Ryanair shares dropped 4.5 per cent, wiping £750 million off the company, while EasyJet tumbled by £215 million and sunk 5.1 per cent.
Wizz Air shares fell 3.8 per cent or £234 million, TUI shares fell 4.5 per cent or £203 million, and Rolls-Royce lost 2.3 per cent of its value or £218 million.
It comes as:
- Brits furious as decision to move Portugal to ‘amber list’ brings travel chaos & families paying thousands for PCR test
- Jet2 cancels ALL international flights & holidays until July 1 after new Covid variant sparks travel chaos
- Great British Staycation in full swing as hopes of foreign hols takes nosedive
- Portugal says it’s ‘hard to grasp logic’ after decision to move country to ‘amber list’ in fresh holiday blow
- Heathrow and Birmingham airports to allow direct flights from banned ‘red list’ countries in trial from next week
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “High hopes that brighter skies were in sight for the airlines have been brought back down to earth with a bump after the UK government brought in even stricter controls on key holiday routes.
“Caution is the name of the game for the British Government, but it’s a hand dealt as a bitter blow to the travel industry.
“As aircraft stay grounded, cash burn is likely to intensify eating into the financial buffers the airlines have built up through debt restructuring and rights issues.
“The situation is also being seen as a drag on the fortunes of Rolls Royce, the aircraft engine manufacturer and supplier of maintenance for jets, as recovery in its commercial business retreats a little further on the horizon.
“There is still a glimmer of hope that swift vaccination roll outs will make way for a late summer revival in fortunes, but the travel industry is now going to have to play an even bigger game of catch up.”