Summer holidays in peril over Covid rise: Fears of European third wave hammers travel stocks
Shares in airlines and travel firms slumped after another Government minister warned Britons against booking summer holidays.
A surge in Covid infection rates across Europe and worries about the speed of vaccine rollouts on the Continent have thrown the prospect of foreign travel in the next few months into doubt.
In a sector-wide sell-off British Airways-owner IAG, Jet2, Easyjet and Carnival saw their shares tumble between 2 per cent and 7 per cent as traders panicked that the companies might lose a second crucial summer season.
Virus threat: A surge in Covid infection rates across Europe and worries about the speed of vaccine rollouts have thrown the prospect of foreign travel in the next few months into doubt
The sell-off came as social care minister Helen Whately advised people against making any holiday bookings yet.
She said: ‘My advice would be to anybody right now is just to hold off on booking international travel.
‘It just feels premature to be booking international holidays at the moment.’
She echoed comments made by Defence Secretary Ben Wallace, who said over the weekend that trips abroad were ‘potentially risky’, and government health adviser Mike Tildesley, who said international travel was ‘extremely unlikely’ because it would risk new Covid variants being brought back to the UK.
A ‘traffic light’ system is among the options now being considered, as well as Covid ‘vaccine passports’.
IAG was the biggest faller on the FTSE 100, sliding 5.2 per cent, or 10.75p, to 195.96p, while Easyjet fell 5.4 per cent, Tui by 4.9 per cent, and Jet2 by 7 per cent.
Plane engine maker Rolls-Royce, which is paid for the number of hours its engines fly also chalked up heavy losses, plunged 4.4 per cent, or 5.1p, to 111.9p.
Cruise operator Carnival lost 1.4 per cent, or 23p, to close at 1660p.
Mike Hewson, chief market analyst at CMC Markets, said the prospect of a third Covid wave across Europe ‘pushes the prospect of any sort of economic restart into the back end of the second quarter’.
The earliest that foreign trips could resume under Prime Minister Boris Johnson’s roadmap out of lockdown is May 17.
Advisers will meet to discuss whether this is still appropriate or will need to be pushed back on April 12. Airline and travel firms were among the worst hit last year when the pandemic threw stock markets into turmoil.
These companies tapped the market for billions of pounds last year – but there are growing fears many will have to turn to shareholders again if this summer collapses.