Travel shares slide as Britons warned not to book foreign holidays | Travel & leisure

Shares in travel and aviation companies, including owners of British Airways, IAG, easyJet and engine maker Rolls-Royce, fell in early trading after the government warned the public not to book overseas travel this summer.

Investors were shocked to think that the weak aviation and travel sectors could see another summer of lost bookings as continental Europe grapples with vaccination programs.

IAG, easyJet, Ryanair, package tour company Tui and Jet2 airline stocks fell as much as 7% in early trading Monday. Rolls-Royce fell 3%.

The negative outlook has undermined some of the strong profits in travel-related businesses since the government announced its “cautious but irreversible” lockdown roadmap on Feb.22.

While pandemic restrictions mean holidays are banned overseas, following Boris Johnson’s timetable, the government had previously announced that they could resume as early as May 17.

Following warnings from scientific experts over the weekend that allowing summer holidays could risk another lockdown, ministers adopted a more cautious tone in the radio interviews on Monday morning, leading to the airline and travel sector sell-off.

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“My advice at the moment would be for anyone to just stop booking international travel,” Social Affairs Minister Helen Whately told the BBC. “It’s just premature to book an international vacation right now.”

Last week the UK reached the milestone that half of all adults received at least one dose of the Covid-19 vaccine. However, much of Europe is still struggling to get the pandemic under control, hampered by the slow roll-out of vaccination programs, rising infection rates and the effects of new variants.

Mark Manduca, an analyst for the airline at Citigroup, said he had noted “increased levels of fundamental investor fatigue,” whose recovery hopes sparked a recent rally in airline stocks. “The upward-moving express train of all things recovery is now starting to fade and falter,” he said.

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