More than £2bn wiped off airline and holiday firms’ value
EasyJet, British Airways owner IAG, Ryanair, TUI, Wizz Air and engine maker Rolls-Royce all suffered heavy falls as travel guidance was updated.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.More than £2 billion has been wiped off the value of UK-listed travel and airline firms following a rolling back of rules on 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.
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.
The sector has been one of the hardest hit since the start of the pandemic and has seen the 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% – wiping nearly £550 million off its value. Ryanair shares dropped 4.5%, wiping £750 million off the company. EasyJet shares closed down 5.1%, wiping off £215 million. Wizz Air shares sunk 3.8% or £234 million, TUI shares fell 4.5% or £203 million and Rolls-Royce lost 2.3% of its value or £218 million.
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.”