Shares in Europe’s biggest airlines and tourism companies tumbled on Monday as new travel restrictions heightened doubts that the crisis-hit industry was poised for recovery.
Low-cost carrier easyJet led the declines among big carriers with a fall of more than 13 per cent, while British Airways owner IAG lost 9 per cent and Germany’s Lufthansa slid 6 per cent.
Several European countries have imposed new travel restrictions following rising cases of Covid-19 in parts of the region, dealing a significant blow to hopes of a late-summer revival for the tourism industry.
The UK and France have warned over travel to parts of Spain, with Britons returning from Spanish holidays now required to self-isolate for 14 days following a spike in infections in three regions.
Madrid has insisted that the pandemic is under control. “Spain is a safe country,” said foreign minister Arancha González Laya, adding that it was “not unusual” for Spain to suffer outbreaks of Covid-19, “like other European countries”.
The UK government defended its decision to impose quarantine rules without warning over the weekend, saying it had been forced to act “quickly” after seeing data at the end of last week showing a rapid rise in infections in parts of Spain.
“We had to make the decision to act very rapidly and decisively,” health and social care minister Helen Whately told the BBC.
Ryanair slipped 8 per cent having reported a loss earlier on Monday, and warned that a new wave of infections in the autumn was “our biggest fear right now”.
The airline said it hoped European governments would not implement further travel restrictions but said it expected a “very challenging year” and was unable to offer financial guidance.’
The airline industry is struggling through an unprecedented crisis, leading carriers to slash jobs and raise cash in a fight for survival as they prepare to carry fewer passengers.
IAG on Friday said it was considering launching a rights issue of up to €2.75bn to strengthen its balance sheet. The company also plans to cut roughly 30 per cent of the workforce at British Airways and has previously warned that it is in the “deepest crisis the company has ever faced”.
Tui, Europe’s largest tourism group, fell more than 13 per cent and said it would offer refunds to any customers who had been due to travel to Spain between July 27 and August 9 or allow holidaymakers to reschedule holidays with a “booking incentive”.
It said it would not cancel holidays to the Balearic or Canary Islands, two regions that have not suffered spikes in cases, and criticised the UK’s decision to impose quarantine measures on travellers returning from Spain.
“This level of uncertainty and confusion is damaging for business and disappointing for those looking forward to a well-deserved break,” the company said at the weekend
