Travel stocks suffer the summer blues
THE summer has gone from bad to worse for travel companies after the Government’s latest holiday advice.
Airline and hotel group shares tumbled after Transport Secretary Grant Shapps announced 16 new destinations would be added to the UK’s ‘green’ travel list.
From next Wednesday, people arriving from Malta, Grenada, the Balearic Islands of Ibiza, Menorca, Majorca and Formentera will no longer have to quarantine on arrival. A dozen or so other destinations are on the list – including questionable summer hotspot the British Antarctic Territory.
But there was another setback, as virtually all of them have been added to a ‘green watchlist’ which means they could be changed to amber status.
The risks hanging over the latest decision will dent hopes of a recovery for the already battered travel sector, which has already lost one summer and a winter.
And talk of dropping quarantine rules for fully vaccinated UK residents returning home from amber countries later this summer has not provided much solace. As Michael Hewson, chief market analyst at CMC Markets UK, put it, concerns are rising that ‘the sands of time appear to be running out on the 2021 holiday season’.
Shares in budget airlines slid, with Easyjet falling 1.5pc, or 14.4p, to 955p, Wizz Air by 1.2pc, or 60p, to 5018p and Ryanair by 1.3pc, or 0.22 cents, to ¤16.40.
And British Airways-owner IAG fell 2.5pc, or 4.7p, to 187.48.
Rolls-Royce dropped too, down 1.2pc, or 1.28p, to 106.5p – as the engine maker’s turnover is closely linked to the number of hours its plane engines fly.
Holiday providers Jet2 (down 1.9pc, or 24p, to 1245p), Tui (down 1.1pc, or 4.6pc, to 405.6p) and hotel groups Whitbread (down 1.7pc, or 54p, to 3196p), Hostelworld (down 2.4pc, or 2.8p, to 111.8p) and Holiday Inn-owner Intercontinental Hotels Group (down 1.2pc, or 62p, to 4980p) were also pummelled.
London’s two major indexes, however, managed to keep their heads above water. The FTSE 100 finished up 0.4pc, or 26.1 points, to finish the week at 7,136.07, while the FTSE 250 climbed 0.6pc, or 135.89 points, to 22,646.01.
The Footsie was driven higher by sportswear seller JD Sports. The retailer was at the top of the blue-chip leaderboard after Nike reported overnight on Thursday another solid quarter – with sales up 29pc in North American and 21pc in Europe, the Middle East and Africa.
JD Sports sells Nike trainers but the numbers also indicate customers are still clamouring to buy sports clothes now that lockdowns are lifting.
The read-through from Nike’s numbers nudged JD Sports up 4.4pc, or 40p, to 952.6p. Building groups CRH (up 2.1pc, or 78p, to 3766p) and Ashtead (up 2.1pc, or 110p, to 5410p) were riding high on the back of news from the US – this time that President Biden is crafting a £416bn infrastructure stimulus plan.
Shopping centre-owner Capital & Regional was in traders’ favour after it reported it had collected 70pc of 2021 rents and 84pc of those due in 2020. It rose 5.4pc, or 4p, to 78.6p, as investors cheered the positive progress as its retail estate reopened.
Amigo made gains after one of its lenders gave the loans group an extra three month lifeline, saying it had extended its grace period due to run out yesterday until late September. The guarantor lender (up 7.6pc, or 0.66p, to 9.4p) has been struggling to repay compensation claims to customers with historical complaints and warned it could still go bust.
Stock market newcomer Literacy Capital – a private equity firm run by City bigwig Paul Pindar – floated yesterday.
Shares listed at 160p but rose to finish at 180p.