Airline shares fall sharply as doubts over summer travel grow

Shares in airlines and other travel companies tumbled in early trading on Monday, as rising coronavirus cases in Europe have accelerated doubts over the summer holiday season.

British Airways owner IAG slid as much as 15 per cent after the market opened before recovering to trade 7 per cent lower, while low-cost rivals easyJet and Ryanair each fell 7 per cent. Travel group Tui was down 6 per cent.

Concerns have intensified that the UK will prolong its ban on non-essential international travel well into airlines’ critical summer season, depriving carriers of revenue following more than a year of disruption. Analysts expect most major European airlines to need new cash if this summer is a write-off.

“We can’t be deaf and blind to what’s going on outside the United Kingdom”, Ben Wallace, defence secretary, told Sky News over the weekend, referring to a surge in cases in continental Europe.

Wallace’s comments came after Mike Tildesley, a member of the government’s Scientific Pandemic Influenza Group on Modelling, told the BBC that international travel was unlikely this summer for the “average holiday-maker” because of the risk of introducing new coronavirus variants to the UK.

“Paris lockdown, Italy’s national restrictions and rising concern in Germany over infection rates are all leading to the loss of the Easter and early spring trades and are being reflected in growing fears that a second summer of travel will be lost,” said Mark Wallace, an airlines analyst at Goodbody.