Yahoo Finance Travel stocks slump amid rising COVID variant concerns across Europe
Travel stocks suffered on Monday as a rise in COVID-19 cases and increased restrictions took its toll on the troubled sector.
In Europe, Spain revealed that it will start to demand a negative COVID test, or proof of vaccination from British tourists who are looking to enter Mallorca, Ibiza, and the surrounding Balearic islands.
Meanwhile, Portugal’s government has also announced measures for UK tourists, requesting the need to quarantine for 14 days upon arrival if they are not fully vaccinated or cannot show a negative PCR test.
It comes as the Delta variant, which was first detected in India, continues to spread across Britain.
In the week since 21 June, what would have been "freedom day" in Britain, coronavirus cases are up 59% in week-on-week figures. Currently in the UK, the Delta strain, which was first detected in India, makes up more than 99% of reported COVID-19 cases, data from Public Health England (PHE) showed.
Rising cases in the UK and tougher lockdown restrictions across the globe, particularly in Asia, caused airlines to fall into the red.
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Travel and tourism company TUI (TUI.L) was among the laggards, dipping 4% on the day, while British Airways owner IAG (IAG.L) dropped 5%, Wizz Air (WIZZ.L) shed 3.7%, Ryanair (RYA.L) was 2.8% lower, and easyJet (EZJ.L) lost 3.5%.
“Optimism on the horizon for the travel industry has once again been obscured by dark clouds, as, one by one, European countries bring back in tough quarantine rules,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“EU leaders are preparing to meet this week and Germany’s Angela Merkel is hoping to gain approval for a consensus on quarantine to stop the spread of the delta variant. So, it’s looking increasingly likely this summer will be a wash out for the industry after all.”
In Asia, Indonesia is battling record high cases and a national lockdown in Malaysia is set to be extended. Thailand also announced tighter restrictions in Bangkok and other provinces.
Australia's most populous city of Sydney plunged into a lockdown after an increase of cases involving the Delta strain, and Darwin also entered a snap lockdown with the trans-Tasman air bubble suspended until the end of tomorrow. Milder restrictions in the Wellington area of New Zealand were all extended.
Japan and Taiwan are also dealing with persistent virus cases and Singapore is subject to domestic restrictions.
Read more: EasyJet launches 12 new UK domestic routes amid staycation boom
“I have stated before that resurgent COVID-19 posed the largest threat to the post-pandemic economic bounce across Asia. We are not there yet, but if we are at this point this time next month, many economic forecasts will need to be revisited for surgery,” Jeffrey Halley, senior market analyst for Asia Pacific at OANDA, said.
South Africa is also tightening restrictions after seeing a sharp rise in COVID-19 cases which is threatening to overwhelm its health system. The country’s seven-day rolling average of daily new cases has doubled over the past two weeks from 10 new cases per 100,000 people on 10 June to 22 per 100,000 people on 24 June, according to Johns Hopkins University.
President Cyril Ramaphosa said on Sunday all gatherings, indoors and outdoors, would be banned for 14 days, along with the sale of alcohol, dining in restaurants and travel to or from the worst-hit areas of the country.
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