MARKET REPORT: Airlines’ much-needed pick-me-up as Government scraps quarantine rules for visitors who have received two jabs in US or Europe
Airlines were given a much-needed pick-me-up as the Government scrapped quarantine rules for visitors who have received two jabs in the US or Europe.
The decision – which had widely been expected – was another milestone moment for the travel industry after weeks of pleading to relax the rules.
It only applies to people from amber-list countries coming into England for now.
Lift: The decision – which had widely been expected – was another milestone moment for the travel industry after weeks of pleading to relax the rules
There is a chance that it will be less of a salvo than it first seems – what with it starting on August 2 there will be relatively little summer left for people to book anything other than last-minute breaks when many have already opted for staycations.
Britons are still not allowed to enter the US if they have been within the UK, Ireland or Schengen zone within 14 days of their arrival. And the rapid spread of the Delta variant throughout much of the world could, in a worst-case scenario, force other countries to close their own borders.
But it was hailed nonetheless by business leaders and the industry as major progress. Willie Walsh, the former boss of British Airways-owner IAG and director general of the International Air Transport Association, said it was a ‘positive, logical and long-overdue development’ that will restore ‘the ability of businesses to operate in global markets, it will help rescue livelihoods in the travel and tourism sector’.
Airline shares all rose, with IAG up 3.8 per cent, or 6.6p, to 181.92p, Easyjet up 4.6 per cent, or 39.4p, to 888.8p, Ryanair up 1.7 per cent, or 0.29 cents to €16.98, and Jet 2 by 2.6 per cent, or 32.5p, to 1275p, while cruise group Carnival climbed 1.4 per cent, or 20.8p, to 1486.8p as the Government also said international cruises could restart from England. Wizz Air, the Hungarian budget airline, surged 8 per cent, or 371p, to 5030p as it said in a first-quarter update that it would carry the same number of passengers in August as before the pandemic.
It will run 100 per cent of its pre-Covid levels despite posting a £97m loss between April and June.
Wizz’s focus on Eastern Europe means it has been hit far less than many of its peers that have a greater reliance on the UK – and it has been able to expand its flight routes as a result.
The quarantine rule changes also lifted a host of other stocks that are linked to the travel industry. WH Smith, which makes much of its money from airport and train station stores, rose 1.1 per cent, or 17.5p, to 1683.5p, Upper Crust-owner SSP was up 6.7 per cent, or 17p, to 269.7p and engineer Rolls-Royce closed up 3.5 per cent, or 3.43p, to 101.7p.
The cheer among travel stocks helped nudge both major London indexes higher, with the FTSE 100 adding 0.3 per cent, or 20.55 points, to 7016.63, while the FTSE 250 advanced 0.6 per cent, or 129.44 points, to 23006.45. Traders and analysts were also kept busy with a bumper day for corporate earnings and updates. Wealth manager St James’s Place (up 6.6 per cent, or 99.62p, to 1607.62p) and the world’s largest listed hedge fund Man Group (up 2.1 per cent, or 4.1p, to 195.55p) made gains on the Footsie.
Man reported blowout figures that showed it made a tenfold gain in performance fees – a key measure of success – in the six months to June and reached a record level of funds under management, now standing at £97billion. St James’s Place had record funds under management too by the end of the first half, at £144billion.
British American Tobacco said sales of its non-cigarette products such as e-cigarettes and heated tobacco devices had risen by 50 per cent in the first half.
Revenues over the six months rose 8.1 per cent to £12.2billion. But backers were unimpressed, with shares falling 1.3 per cent, or 36.5p, to 2734p.
Mexico-focused miner Fresnillo was the Footsie’s top riser after it beat gold and silver production forecasts. Shares jumped 6.9 per cent, or 52.4p, to 806.4p on the update.