Travel shares slide as Britons warned not to book foreign holidays

Holiday and aviation firms including IAG and easyJet are hit amid fears of another summer of lost bookings

Shares in travel and aviation businesses including the British Airways owner, IAG, easyJet and the aero engine maker Rolls-Royce tumbled on Monday after the government warned the public not to book holidays abroad this summer.

Investors took fright at the thought that the struggling airline and travel sectors could face another summer of lost bookings, as continental Europe struggles with the rollout of vaccine programmes.

Shares in IAG, easyJet, and the package holiday company Tui all lost around 5%, while the Jet2 airline fell almost 7%. Rolls-Royce ended more than 4% lower.

The negative outlook wiped off some of the strong gains made at travel-related businesses since the government announced its “cautious but irreversible” roadmap out of lockdown on 22 February.

While pandemic restrictions mean overseas holidays are banned, under Boris Johnson’s roadmap the government had previously said they could resume as soon as 17 May.

However, after warnings over the weekend from scientific experts that allowing summer holidays could risk another lockdown, ministers struck a more cautious tone than before in Monday morning broadcast interviews, prompting the airline and travel sector sell-off.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

“My advice to anybody right now is just to hold off on booking international travel,” the social care minister, Helen Whately, told the BBC. “It just feels premature to be booking international holidays at the moment.”

Last week, the UK hit the milestone of half of all adults having received at least one dose of the Covid-19 vaccine. However, much of Europe is still struggling to get to grips with the pandemic, hampered by the slow rollout of vaccine programmes, rising infection rates and the impact of new variants.

While some flights for May and June have been cancelled, changes and cancellations have been ongoing since restrictions were announced in January.

EasyJet’s chief executive, Johan Lundgren, told an aviation conference he always expected there to be bumps along the way to a travel recovery and denied that a third wave of Covid-19 infections in Europe put it at risk.

“I never thought that this was going to be a straight line,” he said, but he added he was convinced there was light at the end of the tunnel.

A spokesperson for travel association ABTA said there had “been much speculation”, but added: “We believe international travel will be able to restart in a way that manages risk through various mitigations.”

Tim Alderslade, chief executive of Airlines UK, the industry association representing UK-registered carriers, said: “We know that universal, restriction-free travel is unlikely from 17 May but under a tiered system, based on risk, international travel can meaningfully restart and build up, with minimal restrictions in time.”

The government is believed to be considering a “traffic-light” system where some destinations would be off-limits, others require quarantine, and some allow travel without restrictions. The taskforce is due to publish its recommendations on 12 April.


Mark Sweney and Gwyn Topham

The GuardianTramp

Related Content

Article image
Aviation shares jump as relaxation of England’s Covid travel rules planned
BA’s owner IAG, Ryanair and Rolls-Royce buoyed as ministers plan changes for international trips

Mark Sweney

17, Sep, 2021 @12:52 PM

Article image
FTSE 100 hit by biggest fall since June 2020 amid new variant fears
Travel, aviation and oil stocks around world badly hit as worries deepen over effect of fresh Covid wave on global economy

Rob Davies and Mark Sweney

26, Nov, 2021 @5:31 PM

Article image
Nearly £2bn wiped off travel shares as Austria orders lockdown
Fears of restrictions in other European countries this winter knock airlines

Mark Sweney and Graeme Wearden

19, Nov, 2021 @5:16 PM

Article image
UK hospitality and travel shares tumble after hints of second lockdown
British Airways owner down 11% as hospitality sector makes grim prediction for pubs and clubs

Rob Davies and Richard Partington

18, Sep, 2020 @4:56 PM

Article image
Travel firms drop £2bn in value after France added to UK Covid quarantine list
The British Airways owner, IAG, and struggling tourism group Tui among the fallers

Mark Sweney

14, Aug, 2020 @8:32 AM

Article image
Steep rise in flight and holiday prices as UK travel green list looms
Increase in prices fuelled by limited flights to quarantine-free holiday destinations

Julia Kollewe

07, May, 2021 @4:25 PM

Article image
Travel shares rise as UK considers relaxing rules on foreign holidays
Airline and travel firms rally on news that double-jabbed Britons may be allowed to visit amber list countries

Gwyn Topham

17, Jun, 2021 @12:22 PM

Article image
A few points to ponder before beginning a bailout of airlines | Nils Pratley
Keep it industry-wide, don’t support shareholders, and offer simple non-lending support

Nils Pratley

16, Mar, 2020 @8:00 PM

Article image
Airline and holiday firms hit out at UK’s ‘utterly confusing’ travel advice
Bosses of easyJet, British Airways, Ryanair, Jet2, Tui UK and others write to Boris Johnson over situation

Gwyn Topham Transport correspondent

26, May, 2021 @2:42 PM

Article image
Travel and tourism shares sink after Brussels attacks
Thomas Cook leads decline as investors dump travel-related stocks for traditional havens of gold and silver

Nick Fletcher

22, Mar, 2016 @5:46 PM