Airlines rally as Britain set to relax US and EU travel rules

·3-min read
Both easyJet and British AIrways saw their stocks rise on Wednesday morning. Photo: Getty Images
Both easyJet and British AIrways saw their stocks rise on Wednesday morning. Photo: Getty Images

Stocks of airlines including British Airways owner IAG (IAG.L) and easyJet (EZJ.L) soared on Wednesday as the UK government said it was going to relax restrictions around US and EU travel.

Passengers fully vaccinated with jabs authorised by authorities in Europe and the USA will be able to travel to England from countries on the amber list without having to quarantine on arrival, starting from 2 August, the government announced.

IAG’s stock rose 3.4% on Wednesday afternoon while easyJet’s share price ticked up 4%. Rival budget airline Ryanair (RYA.L) gained about 2%.

Earlier rules stipulated that those who have been fully vaccinated in the UK do not have to quarantine when returning from the US, which is on the amber list, or the EU, members of which are either deemed green or amber.

But this did not apply to people who have been vaccinated outside the UK.

The travel industry, hit hard by the pandemic, had been urging a relaxation in this rule so that expats and tourists can travel into the UK more easily.

“A big sigh of relief has rippled through the travel and aviation sector with the confirmation that double jabbed arrivals from the US and the European Union will no longer have to isolate," said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

The news comes as part of the second Global Travel Taskforce review, and "will boost economy and make it easier for those vaccinated in Europe or USA to return to the England and unite with family and friends," the government said.

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However, easyJet's CEO was sceptical that the change would help the industry. "It's the right thing, it should be done, but like I said it is a little bit too late," Johan Lundgren told LBC Radio.

"Even if they can avoid the quarantine, you're still going to have the very expensive PCR testing that's going to make this out of reach for many, many people," he added.

Streeter said questions remain about how many tourists will come flocking, given that travel to the UK still isn’t advised for US tourists.

She added that uncertainty for the travel sector continues to linger, given that many destinations are still 'amber', "leaving so many holiday plans still in disarray."

The government has also said it is giving the green light for international cruise sailings to restart from England in line with Public Health England guidance.

Meanwhile Wizz Air’s (WIZZ.L) stock jumped about 6% as it announced it has hired 600 new cabin crew, with its CEO predicting a rebound in demand.

Wizz Air's shares were flying high on Wednesday morning. Chart: Yahoo Finance UK
Wizz Air's shares were flying high on Wednesday morning. Chart: Yahoo Finance UK

"Through the quarter we did see encouraging recovery patterns in passenger air travel," said József Váradi.

"People began returning to flying despite mobility restrictions still impacting travel. We carried 3m passengers during the quarter, more than four times the number we carried in the same period of last year."

In July and August Wizz expects to operate around 90% and 100% of its 2019 capacity, respectively, "making Wizz Air the first major European airline to fully recover capacity to pre-COVID-19 levels".

In the three months to 30 June, the airline's revenue was €199m (£170m, $235m) and its total cost increased 56.1% to €307.7m.

Its statutory loss for the period was €114.4m.

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