Travel stocks soar on holiday hopes

SHARES in travel firms soared amid signs that lockdown restrictions across Europe might finally be easing – paving the way for the summer holiday season to begin.

On a day that saw the FTSE 100 index hit a four-week high and the FTSE 250 record its best finish for 11 weeks, sources close to the German government said the country’s borders may begin to reopen for travel from mid-June.

And Spain announced that the summer tourist season would go ahead, as the major cities of Madrid and Barcelona began to allow larger meetings of residents in their homes or on the terraces of bars and restaurants.

Pressure is now mounting on UK ministers to set out guidelines for how they will reopen the country’s travel industry.

Shares in tour operator Tui rocketed 52pc as investors hoped that holidaymakers might soon begin to book trips again.

Airlines were also finally back in favour, as British Airways’ owner IAG climbed nearly 23pc and Easyjet jumped 19pc.

Cruise company Carnival was up 13pc, while Intercontinental Hotels shot up more than 9pc.

Neil Wilson, chief market analyst at electronic trading platform Markets, said: ‘There is a lot more hope that travel restrictions across Europe will be eased in time for the summer holidays.

‘If the summer holiday season can be saved, it would be a big plus after most of us wrote it off.’

Travel companies were some of the hardest hit by the coronavirus pandemic.

As countries around the world started clamping down on travel at the end of February, demand dried up and investors sold stocks amid fears that the number of customers asking for refunds could force some companies to collapse.

Desperate appeals for Government support from airlines such as Sir Richard Branson’s Virgin Atlantic added to investor pessimism.

Despite yesterday’s rally, Tui is still down 52pc since the beginning of the year.

But the optimism did help lift the FTSE 100 index of Britain’s leading listed companies to its highest level in a month.

It edged up 1.2pc to 6067.8 points. At one point, the bluechip index hit 6130, which was its highest point since early March when the coronavirus rout was in full flow.

The tentative recovery will be welcomed by savers, who have been battered by a combination of tumbling markets and recordlow interest rates.

At its worst, on March 23, the FTSE 100 had crashed 35pc from its January peak, wiping billions of pounds off the value of Britain’s biggest companies.

Since then it has recovered by 22pc, though the index is still 21pc off its pre-pandemic highs. The FTSE 250 index rose more than 3pc to its highest level since early March.

It closed 534.56 points higher, at 16,933.42 yesterday.

France’s CAC index was also up by 1.4pc, while Spain’s Ibex 35 climbed 2.2pc.

In Germany, the Dax index was up 1pc, helped along by its largest airline, Lufthansa, reaching a bailout agreement.

Lufthansa has bagged £8bn from Germany’s government, in a deal which has infuriated rival Ryanair’s chief executive Michael O’Leary.

O’Leary, who slammed the UK government’s plans to quarantine travellers for 14 days as ‘idiotic’, claims that Lufthansa’s bailout gives the German carrier an unfair edge.

He said: ‘Ryanair will appeal against this latest example of illegal state aid to Lufthansa, which will massively distort competition.’