UK airlines ask PM to remove travel restrictions as Omicron pushes shares down
Bosses of major UK airlines have sent Prime Minister Boris Johnson a letter asking the government to remove travel restrictions , as stocks today continued to plummet.
Easyjet, as well as British Airways’ (BA) owner IAG and Ryanair, saw their stocks go down 4.72, 5.29 and 3.46 per cent respectively because of fears of further travel restrictions.
The letter – signed among others by the bosses of Ryanair, Easyjet and BA – told the PM that “travel has been singled out with the introduction of disproportionate restrictions.”
“Pre-departure and upon-arrival testing clearly add very little value to our Covid protection, but unnecessarily disrupt Christmas for families as well as businesses while severely damaging the UK travel industry,” the letter said.
Aviation stakeholders asked the government to remove the unnecessary measures at the next formal review next Monday, as well as to provide a package of economic support measures to help the industry continue to face the challenging period.
“We and our customers feel sincerely let down, having believed a more pragmatic, evidence-led approach to travel, in line with the rest of the world, had been achieved and agreed by all concerned just a few months ago,” the letter continued.
“We urgently request you meet with us, to understand the problems that we and our customers are now facing because of these measures, which the transport secretary himself admitted risked ‘killing off’ the travel industry. We urge you to act now to prevent this from happening.”
Today’s followed reports yesterday that chief executives from BA, Virgin Atlantic and Easyjet intended to ask the Treasury to extend their Covid-19 loans, providing further economic help past next year’s deadline, Morning Wire reported yesterday.
According to Susannah Streeter, Hargreaves Lansdown’s senior investment and market analyst, investors will need to “buckle up for another burst of severe turbulence affecting the sector.”
“Worries about plunging confidence amongst the travelling public and concerns about future travel restrictions being imposed due to the spread of the Omicron variant have led to fresh volatility for airline stocks and companies reliant on the industry,” she said today.
“Shares in IAG and Ryanair fell sharply on Monday with losses accelerating towards the end of the working day after it’s feared new testing requirements will cause severe repercussions in terms of booking rates over the coming months.
“News that Air France and KLM may seek a fresh capital raise is also weighing on the sector which has pushed Rolls Royce and Melrose lower, given how reliant both companies are on the health of commercial aviation.”