Plan B sparks a market backlash

Rolls-Royce and airlines lead travel stock sell-off

Airline, travel and hospitality shares dived after Boris Johnson triggered his ‘Plan B’ to counter the growing threat of the Omicron variant.

The move means 6m office workers will be urged to work from home on Monday and vaccine passports will be needed for nightclubs and large venues – while masks will be required in indoor spaces such as theatres and cinemas.

The plan is expected to wipe billions off the economy and is another blow for many industries which have been crippled since the pandemic began nearly two years ago.

British Airways-owner iAG was one of the hardest hit amid fears about the introduction of further travel restrictions, with analysts telling the Daily Mail that booking a long-haul flight at the moment is a ‘gamble’. its shares fell 3.3pc, while easyJet lost 2.5pc and Wizz Air tumbled 2.4pc.

Aviation analyst Alex Macheras said: ‘The most damaging aspect is the endless U-turns by the Government and lack of clear guidance. The lack of strategy is a crisis all on its own.

The average person on the street is confused and intimated and has concluded that they won’t travel.’

Holiday stocks were also in freefall with travel firms On the Beach down 6.2pc and Jet 2 by 4.4pc. On the Beach boss Simon Cooper warned his firm had seen a ‘big tail-off’ in terms of bookings and online searches for holidays since the latest coronavirus variant emerged.

But the biggest faller was bluechip stock rolls-royce after it warned international travel was not recovering fast enough.

Britain’s engineering champion said flying hours using rolls’ engines by its customers are currently at just 50pc of pre-pandemic levels.

rolls is paid for the time its engines fly, in what are dubbed ‘power by the hour’ contracts.

Warren east, chief executive, said: ‘Clearly, flying hour recovery in travel has not been as fast as anyone would have liked.’ On the Omicron variant, he added: ‘Airlines are opening up more capacity on routes and then pausing as governments introduce temporary restrictions and so on. it’s going to be ten steps forward and two steps back.’

rolls was firmly rooted to the bottom of the FTSe100 leaderboard, down 3.4pc.

Hotel groups were feeling the pain and interContinental Hotels was down 1.6pc, while Whitbread dropped 0.7pc.

The restaurant, pub and nightclub industries are key for keeping city centres vibrant and the latest restrictions will set many businesses back by months.

The Centre for economics and Business research warned Christmas party cancellations and travel restrictions could cost the economy £1.3bn in December. Sarah Willingham, the former Dragons’ Den star and founder of bar owner nightcap, said: ‘We’ve seen a lot of postponements today.

Working from home for the hospitality sector is a huge blow.

‘it is the big corporates that are cancelling. They can’t tell workers not to come in on Monday and then have a Christmas Party on the Wednesday.’