British travel rule havoc hits airline stocks

LONDON, July 19 (Reuters) - Britain's latest travel rule
change hit shares in airlines on Monday, with carriers including
easyJet and British Airways-owner IAG losing as
much as 6% after a surprise shift in requirements for arrivals
from France.

The UK travel industry has for months criticised the
government's strict quarantine rules and last minute changes to
country classifications which has resulted in a roller-coaster
of booking surges followed by mass cancellations.

Britain said on Friday that it was scrapping a planned
easing of coronavirus rules for fully-vaccinated UK arrivals
into England from France. Rising cases of one coronavirus
variant in France meant that arrivals from there would no longer
be exempt from quarantine.

The surprise raised concerns about further changes,
discouraging people from booking, just when fully-vaccinated
people are able to travel to most of Europe without needing to
quarantine on return.

Shares in easyJet, whose biggest market is Britain, were
down almost 6% in midday trading, while IAG was down 4%, and TUI
and Jet2 down more than 3%.

The stocks have all lost around 20% of their value over the
last three months as new variants and ongoing travel rules and
restrictions have crushed hopes for a bumper summer. They are
all trading well below where they were prior to the pandemic.

"Fears are that Spain and Greece could be similarly
treated," Goodbody analysts said in a note.

Spain was Britain's no.1 destination before the pandemic,
with France in no.2 position. Greece is another popular
destination for British holidaymakers.

EasyJet Chief Executive Johan Lundgren said Britain's
traffic light system, which classifies countries as green, amber
or red depending on their COVID-19 risk level, was "falling
apart" and causing confusion and uncertainty.

Britain's travel recovery lags that of other European
countries. Eurocontrol data showed that on July 12, UK flight
numbers were 65% down on the same day in 2019, behind Spain,
Germany, France and Italy which were down between 30% and 45%.

Figures released by Britain's busiest airport Heathrow
showed passenger numbers in June were still nearly 90% down on
pre-pandemic 2019 numbers.

(Reporting by Sarah Young; Editing by Kirsten Donovan)