A sigh of relief ripples through the travel and aviation sector

A Sigh of Relief Ripples Through the Travel and Aviation Sector
JESHOOTS-com / Pixabay

A sigh of relief ripples through travel and aviation sector as restrictions lifted for vaccinated arrivals

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  • Travel caterer SSP (LON:SSPG) up 6.4%
  • Wizz Air (LON:WIZZ) up 7.1%
  • IAG (LON:IAG) up 3.3%
  • Rolls Royce (LON:RR) up 3%
  • Easyjet (LON:EZJ) up 4.5%
  • Ryanair (LON:RYA) up 1.8%

Good News For UK’s Travel And Aviation Sector

“A big sigh of relief has rippled through the travel and aviation sector with the confirmation from the UK Transport Secretary that double jabbed arrivals from the US and the European Union will no longer have to isolate.

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Speculation that a decision was imminent had pushed up shares in British Airways owner IAG which is heavily reliant on transatlantic bookings. Rolls Royce was also among the FTSE 100 risers, given that the group’s bread and butter comes from servicing and delivering wide body aircraft engines, which are used primarily for long-haul flights. There are higher hopes its recovery will materialise more quickly with normality beginning to return for the airline industry.

But questions remain about just how many tourists will come flocking, given that travel to the UK still isn’t advised for US tourists. But it is another hurdle knocked over in the attempt to offer the industry some semblance of a summer season. In the FTSE 250, EasyJet, Ryanair and Wizz Air maintained their higher trajectory with investors hopeful that EU travellers might now widen their travel plans, which have been largely limited to inside the block. Ryanair took delivery of its first batch of “Gamechanger” aircraft just days after Portugal was removed from the green list, so a reopening of routes for vaccinated tourists will be particularly reassuring.

The relaxation of the rules for double jabbed tourists is the comfort blanket caterer SSP has longed for, and it was one of the top risers on the FTSE 250. It relies on travellers to pick up snacks from its Upper Crust kiosks, Ritazza cafes and other franchise outlets. Investors are clearly hoping that now the stage is set for tourists to return, footfall will finally rebound across its airport and train station network, where the chain runs concessions.

However uncertainty still remains for the travel sector, given that for now the traffic lights appear to be stuck on amber for many destinations, and amber plus for France, leaving so many holiday plans still in disarray.’’

Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown

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