Airlines and package holiday operators have reported a surge in demand for holidays to countries placed on the green list yesterday, but City analysts don’t expect any material uptick in fortunes for the carriers.
Sixteen destinations were added to the list so visitors don’t have to quarantine when they now return from the Balearics, Malta and Madeira.
Airlines today said that they were putting on additional flights to meet the demand. Ryanair PLC (LON;RYA) said it was laying 200,000 additional seats to Malta, Ibiza and Palma for July, August and September.
Jet2 , meanwhile, said it had seen the highest volume of bookings to the Balearic Islands in almost a year, with bookings for July alone up more than 3,000%.
Bookings for Malta and Madeira had jumped by almost 1,500% said the airline.
Brokers at Peel Hunt, however, said the absence of the Greek Islands and any mainland destinations such as Spain, Portugal and Italy was disappointing.
Also, with Malta an exception, all the additions are on a green watch list, meaning they can become amber again if the number of COID-19 cases rises.
Government comments today were that fully vaccinated people will be able to travel from an amber list country without quarantine later this summer, but this change won’t come quickly enough to help the airlines said the broker.
“With the next review not due for around three weeks, the start of the school holidays at the earliest, and the risk that more EU countries require travellers from the UK to quarantine, bookings through July are likely to remain subdued.”
Sean Doyle, British Airways’ chief executive, also expressed disappointment.
“We cannot afford another missed summer. There are jobs at stake, Britons separated from family members and we cannot afford to allow the success of our vaccine programme to be wasted,” he said.
Analysts said investors interested in the sector need to look to those airlines that have a good market share and a record of cost management.
Peel Hunt highlighted Jet2 (LON:JET2) reiterating its ‘buy’ rating and target price of 1,580p.
Describing the changes in the green list as a ‘small step’ towards reopening travel, it sees demand remaining constrained though Jet2 is better capitalised than its competition and may be able to use the proceeds of the recent £387mln convertible issue to acquire a younger fleet inexpensively.
Shares in Jet2 fell 2.8% to 1,233p and easyJet, Ryanair and British Airways owner IAG all too lost ground.
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