More than £ 2billion wiped out the value of UK travel agencies and airlines after updated travel list shattered holiday hopes
MORE than £ 2 billion has been wiped from the value of UK listed travel and airline companies after the updated travel list dashed hopes for overseas vacations.
EasyJet, the owner of British Airways IAG, Ryanair, TUI, Wizz Air and engine manufacturer Rolls-Royce all suffered heavy falls as word spread that no other country would be added to the government’s green list.
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The move was confirmed after the stock market closed, but rumors were enough to reduce the value of the airlines by several hundred million.
Thousands of Britons have seen their travel plans blown up in smoke by the government advising Britons not to travel to Portugal and forcing returning passengers to self-isolate from 4 a.m. on Tuesday.
The country was relegated to Britain’s Orange List today after ministers sounded the alarm over a worrying new “Nepalese mutation” of the Indian variant detected in the holiday hotspot.
Meanwhile, no country is added to the green list in another punch for Britons seeking a post-pandemic getaway, meaning the list of potential destinations is limited to a handful of places like Gibraltar and the Falkland Islands.
Seven countries have also been put on the red list where travel is prohibited for all except returning Britons.
The latest changes have shaken vacationers’ plans, but have also wreaked havoc on the tourism industry.
It has been one of the hardest hit since the start of the pandemic and has seen companies solicit investors for funds and borrow heavily through government-backed programs.
Many had hoped that the reopening of holiday hotspots could see an improvement in business fortunes, but the latest guidelines on Thursday have stifled those hopes.
IAG saw its shares close 5.4%, wiping out almost £ 550million from its value.
Ryanair shares fell 4.5%, wiping off £ 750million from the company, while EasyJet fell £ 215million and sank 5.1%.
Wizz Air shares fell 3.8% or £ 234million, TUI shares fell 4.5% or £ 203million and Rolls-Royce lost 2.3% of its value or £ 218million.
It comes as:
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “High hopes that brighter skies were in sight for airlines were brought back to earth with a bump after the UK government introduced even tighter controls on major vacation routes.
“Caution is the watchword of the UK government, but it is a blow to the travel industry.
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“As planes stay on the ground, cash consumption is likely to escalate and eat away at the financial cushions that airlines have built up through debt restructuring and rights issues.
“The situation is also seen as a drag on the fortunes of Rolls Royce, the aircraft engine manufacturer and jet maintenance provider, as the resumption of commercial activities recedes further on the horizon.
“There is still a silver lining that the rapid rollout of immunization will give way to a recovery in fortunes at the end of the summer, but the travel industry is now going to have to play an even bigger game of catching up. “