MARKET REPORT: Airline stocks take off after Portugal is added to UK’s list of safe holiday destinations
Airline stocks took off yesterday after Portugal was added to the UK’s list of safe holiday destinations.
Ministers said travellers returning from the country will no longer have to go into quarantine from Saturday, prompting a huge surge in bookings.
Portugal is a firm favourite of sun-seekers, with some 1.8m Britons visiting per year.
The easing of restrictions offered welcome relief to embattled airlines, which have seen passenger numbers hammered by global travel restrictions.
Easyjet was up 3.5 per cent, or 19.4p, to 573.8p, while rival budget carrier Ryanair rose 2.9 per cent, or €0.32, to €11.45. Tui also rose 4.8 per cent, or 14p, to 308.2p, Wizz Air by 1,5 per cent, or 52p, to 3614p and British Airways owner IAG by 1.4 per cent, or 2.7p, to 193.2p. Dart Group, the owner of Jet2, rose 2.2 per cent, or 14.5p, to 676.5p.
Jet2 boss Steve Heapy said: ‘We welcome this change in government advice which means that customers can once again look forward to enjoying their well deserved holidays in the stunning Algarve region.’
It was despite Austria, Croatia and Trinidad and Tobago joining the quarantine list, triggering a rush of holidaymakers trying to get home before the restrictions kick in.
Amid the airlines’ cheer, however, the FTSE100 dipped into the red. Shares were knocked back despite upbeat data showing the economic recovery from the coronavirus is gathering pace.
A rapid survey by IHS Markit and CIPS found that British industry has this month reported its fastest growth in almost seven years, after the easing of lockdown restrictions. The UK’s purchasing managers’ index (PMI) of economic activity – where scores below 50 show decline and above show growth – gave a reading of 60.3 for August, beating predictions of 57.1 and up from July’s 57.
It was also better than the eurozone reading, which fell from 54.9 to 51.6 and dented hopes of a Vshaped recovery on the Continent.
The boost to UK output was credited to a jump in consumer spending that followed the reopening of large parts of the economy, as people increasingly took ‘staycations’, ate out and visited shops more often.
But the positive news failed to lift the Footsie. The blue-chip index closed down 0.19 per cent, or 11.45 points, at 6,001.89.
One reason may have been the bleak picture for jobs painted by the PMI, which showed that the pace of layoffs at services and manufacturing firms sped up in August. Experts said this reflected widespread concern that the recovery might fade in the coming months, with the Government’s jobs furlough scheme set to close at the end of October. Rhys Herbert, senior economist at Lloyds Bank, warned growing confidence could ‘easily be shattered by a resurgence in the virus and the reintroduction of lockdown measures’.
‘The biggest worry remains the strength – or fragility – of the economy,’ he added.
Brexit concerns were also likely weighing on the Footsie, as another round of talks between the UK and EU once again ended with both sides claiming the other had failed to make any real concessions.
The FTSE250 index of medium-sized firms also struggled to keep its head above water, but eventually closed up 0.46 per cent, or 81.25 points, at 17577.68.
Eddie Stobart Logistics was one of the risers, up 6.6 per cent, or 0.5p, to 8.1p after revealing a three-year contract to handle transportation services for two of supermarket Morrisons’ distribution centres.
Developer Inland Homes was up 5 per cent, or 2.5p, to 53p after announcing it had acquired a major site in Hounslow, west London.