Airlines and travel stocks surge as U.K. sets out lockdown exit plans - MarketWatch

Easyjet shares soared almost 10% on Tuesday after the low-cost carrier reported a surge in summer ticket sales, hours after U.K. Prime Minister Boris Johnson set out England’s proposed route out of its third COVID-19 lockdown.

Flight bookings from the U.K. leapt 337%, and holiday bookings jumped 630%, with leisure trips to Málaga, Alicante, Palma, Faro and Crete among the top destinations, and August proving the most popular time for travel, easyJet EZJ, +4.51% said in a statement.

Johnson said the government’s global travel task force will issue a report on Apr. 12 recommending how international travel can safely restart, which he said will “give people time to make their plans for the summer.” The lockdown ban on most international travel will stay until at least May 17.

Shares in easyJet, which have risen more than 17% so far this year, rose 9.12% in early morning trading in London on Tuesday. British Airways owner International Airlines Group IAG, +1.97% rose 8%, while tour operator TUI TUI, +2.63% was up 6%.

Johan Lundgren, chief executive of easyJet ESYJY, +6.16%, said Johnson’s announcement had “provided a much-needed boost in confidence” for the airline’s U.K. customers.

“We have consistently seen that there is pent-up demand for travel and this surge in bookings shows that this signal from the Government that it plans to reopen travel has been what U.K. consumers have been waiting for,” he said.

Read: Welcome home: U.K. arrivals from high-risk countries start checking in at quarantine hotels

TUI TUI1, +3.17%, Europe’s largest tour operator, said destinations in Greece, Spain and Turkey were the most booked overnight, with people choosing to travel from July onward.

Travel agency Thomas Cook told the BBC that traffic to its website was up more than 100% on Monday, with bookings “flooding in” for countries like the Dominican Republic, Greece, Cyprus and Mexico.

Neil Wilson, chief market analyst at Markets.com, said that travel stocks showed optimism on ‘the promise of a salvaged summer season.” But he warned that “international travel will remain problematic and subject to restrictions, isolation, and testing,” even though bookings have shot up.

Earlier in February, transport secretary Grant Shapps told the BBC that it was too soon to book vacations, either domestically or internationally, and that they would remain banned until “everybody” has had a COVID-19 vaccine.

The number of people in the U.K. who have received their first dose of a COVID-19 vaccine has now passed 17.7 million, according to government data.

Read: Even one dose of Pfizer vaccine reduces coronavirus-infection risk, Public Health England says

Johnson also set out the latest vaccine-efficacy data on Monday, with Public Health England finding that one dose of the shot from drug company Pfizer PFE, -1.02% and its partner BioNTech BNTX, -2.29% reduces hospitalizations and deaths by at least 75%. Analysis of the efficacy of the AstraZeneca AZN, -2.49% vaccine, which has been developed in partnership with the University of Oxford, continues, with promising early results, Johnson said.

The government is aiming for everyone aged 50 and over, and people with
underlying health conditions, to have been offered a first dose
of the vaccine by Apr. 15, and a second dose by mid-July.

Read: COVID-19 hotel quarantine from high-risk countries to start in U.K. from Feb. 15

Hotel stocks were also boosted by Johnson’s road map, with Holiday Inn and Crowne Plaza owner InterContinental Hotels IHG, -1.62% adding around 2.15% on Tuesday. Whitbread WTB, -0.99%, which owns Premier Inn, rose 1.97%.

IHG IHG, -0.09% said on Tuesday that 2020 was the most challenging year in its history, as it reported a group operating loss of $153 million for the year ended Dec. 31, compared with a profit of $630 million in the previous year.

“2021 has begun with many of these challenges still in place, with more meaningful progress towards recovery for the industry unlikely until later in the year and dependent on global vaccine rollouts, lifting of restrictions and an acceleration in economic activity,” said IHG Chief Executive Keith Barr, in a statement.

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2021-02-23 20:28:00Z
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