Business & Investment

Airline outlook dims again as new travel curbs threaten summer By Reuters

© Reuters.File photo: Outbreak of coronavirus disease (COVID-19) in London

Lawrence Frost and Sarah Young

London (Reuters)-British minister warns on summer vacation bookings on Tuesday and Germany considers a dramatic new crackdown on travel, even within the EU, leading to a recovery prospect for airlines struck by the European coronavirus Is getting worse.

Vaccination minister Nadhim Zahawi said UK consumers should “absolutely” refrain from booking vacations. “Currently, there are still 37,000 people hospitalized with COVID. It’s too early to guess about summer.”

Airline stocks, which have grown steadily since the November vaccine breakthrough, are under pressure this week amid concerns that new coronavirus variants and the resulting blockade are now threatening the most important summer season. Have received.

Major airlines have secured liquidity for months more to survive the recession, analysts say, but recent recessions may require new funding to survive the next winter. Means that there is.

Citi analyst Mark Manduka said in a memo that tightening regulations and testing demand not only threatened “stress and friction” during the summer, but “more than investors currently envision. The recovery in demand will be cut off. “

The Easter holiday travel outlook (which will be in early April this year) is already almost hopeless.

German Chancellor Angela Merkel told party lawmakers Tuesday that “tourism should not take place” as her government has considered stricter measures.

Throughout the crisis, the government sought to maintain a travel link between the EU and the European Free Trade Association (EFTA) states. However, over the weekend, Sweden banned travel from neighboring Norway to stop the epidemic of the new COVID-19 variant, and Belgium banned non-essential travel.

The UK is also considering compulsory confinement to “quarantine hotels” for some international arrivals, following the example of some Asian countries.

Shares of EasyJet (LON :) and British Airways’ parent company IAG (LON :), which were released to the UK, wiped out some of the rise since November and were 14% in the darkness of the resurrection in five days. It has fallen. Ryanair lost 6% over the same period.

Aircraft manufacturers have been plagued by large pre-crisis purchase orders, but some suppliers and engine manufacturers are enthusiastic.

Rolls-Royce (OTC :) further lowered its financial forecast on Tuesday, forecasting a £ 2 billion ($ 2.7 billion) cash outflow this year as the collapse of flight times hit so-called hourly contracts. maintenance.

British airlines and airports have warned that further travel restrictions are “catastrophic” and have sought a custom support package to help them survive a long-term crisis.

The new curb also threatens employment and freight transportation, including medical equipment, according to industry group AirlinesUK.

An important role of airlines in the distribution of vaccines is that some oppose restrictions that affect staff.

Air France-KLM, part of KLM, has won a partial grace from the Dutch plan to require a quick COVID-19 test for returning crew members after warning of cargo disruptions.

Airline outlook dims again as new travel curbs threaten summer By Reuters Airline outlook dims again as new travel curbs threaten summer By Reuters

Back to top button