Travel stocks slump as no countries set to be added to green list

(Sharecast News) - Travel stocks slumped on Thursday amid reports the government will not be adding any new destinations to its quarantine-free green list when it updates Britons later in the day.
It had been hoped that travel hotspots such as the Spanish and Greek islands and Malta would be added to the government's green list.

In addition, it was understood that Portugal was set to be removed from the 'safe' green list for travel and added to the amber list.

The government unveiled its travel list on 7 May, with just 12 destinations in the green zone. Travellers returning to England from green list destinations do not need to quarantine but do still need a negative Covid-19 test before departure and another PCR test within two days of arrival.

Red or amber destinations are those the government does not recommend travel to. According to reports, more destinations are expected to be added to the red list.

Travel plays were hit by the report and by 1450 BST, British Airways and Iberia owner IAG was the biggest loser on the FTSE 100, trading down 4.9%. EasyJet and TUI were 5.2% and 4% lower, respectively, while WH Smith was off 3.2%. Wizz Air fell 3.3% and Upper Crust owner SSP declined 1.8%. Engine maker Rolls-Royce was off 1.8%.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said it was dawning on investors that "another summer washout could be on the way."

"As aircraft stay grounded, cash burn is likely to intensify eating into the financial buffers the airlines have built up through debt restructuring and rights issues," she said.

"The situation is also being seen as a drag on the fortunes of Rolls Royce, the aircraft engine manufacturer and supplier of maintenance for jets, as recovery in its commercial business retreats a little further on the horizon. There is still a glimmer of hope that swift vaccination roll outs will make way for a late summer revival in fortunes, but the travel industry is now going to have to play an even bigger game of catch up."