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https://www.statista.com/statistics/1139048/coronavirus-case-rates-in-the-past-7-days-in-europe-by-country/
Spain is the key stat here, most of countries with highest rates are not main Tui destinations if at all but worrying for EasyJet.
Canaries one of TUI’s most popular winter destinations will more than likely be unaffected and UK holidaymakers will I’m sure be welcome.
WHO states Europe is at the epicentre of Covid cases . Presumably, Tui will still be able to satisfy demand for their long haul winter holidays.
The market will probably knee jerk downwards in the morning before regaining early losses as reality sets in that lockdowns and mandatory vaccines for all citizens of an entire country will be counter productive to stability and vaccine take up. Short term, less onerous & simple compulsory measures such as mask wearing in doors, public transport & large outside gatherings will be far more effective.
If a good case can be argued for going against the crowd then its often a good strategy.
Is Austria a bell weather for holidays and aviation save for 3 day Christmas Market breaks & skis temporarily clogging up Innsbruck airport for a few months?
Austria is an outlier a lockdown in a country making vaccines mandatory for all. Who says fascism is dead in EU? Countries with low vaccination rates are unlikely to be ‘popular’ but border controls between countries with high infection rates and robust vaccine programmes are pointless.
More concerned with vicarious impacts of Covid on airlines such as BA arm of IAG & Easyjet. BA will have to overcome a business model rooted in pre-Zoom /MS teams times , and Easyjet trying to compete with Ryanair on price with much of their fleet sold on lease back schemes whilst Ryanair are putting in new orders with Boeing . In boxing terms it might be termed a mismatch.
Tui have the benefit of having a strong holiday offering to long haul winter destinations and with likes of Mexico off the UK red list the flights to Cancun will imo be back to capacity not to mention the connecting cruise flights to the Caribbean. No doubt they’ll also be using their fleet of dreamliners to max capacity and reduce cost to likes of Cyprus, Turkey and Canaries.
The shorters will bemoan if it wasnt for backing of German Gov Tui would be bust but they do have that support + a fairly wealthy Russian shareholder who is unlikely to see his investment head south unlike the flights.
Imo , Covid is no longer the issue for airlines but how they’re positioned to adapt going forward. Short haul airlines with out a strong packaged holiday are really up against it with Ryanair and Tui have the benefit to get revenues back on track with the long haul winter sun holidays.
I can’t see Tui back to March 20 levels and 200 to 210p a better bet than some of the alternatives in the sector, at least I hope so! However with exception of Ryanair it will take years for airlines to get balance sheets back to 2019 levels if they ever do so investing in the sector is a tad more risky and then we have the green lobby. Turbulence ahead but still a conservative buy.
Its actually 300 in every 100,000 or 3 in every 1000 . Even so your point still stands. Lockdowns now are pointless compared to last winter and medium term measures such as mandatory masks in all indoor settings and vaccine passports until such time the virulence greatly diminishes are sensible precautions that need have no impact on our immediate economy and eventual long term path out of this.
If lockdowns are still necessary then Governments are with holding information that the situation is more grave than the general public
Tui have a big demand for long haul winter season destinations for 21/22 and allegedly their Dreamliner crews have been prepared for a full schedule and we shouldn’t forget they have, like others expanded into cargo.
Price drop today was driven purely by German Health Minister talking about lockdowns & a ridiculous national emergency based on infection levels of 300 per 100,000 or I in 333. UK rate is around 1 in 65 . We can only dream of 1 in 333. All that said a short 2/3 week partial lockdown in Northern Europe is sensible to do as it should have been for UK at end of September as vaccine effect started to wane as is now happening in Germany. Austria’s temporarily draconian measures actually augurs well for the winter sports season.
Southern EU is doing far better and so I doubt popular winter sun destinations such as the
Canaries will be affected of likes of Cape Verde.
In March 2020 when this stock fell off a cliff with the rest of the airlines, borders were closed, daily death rates were a 1000+ and without any hope of a cure/vaccine the fear factor was off the scale for the majority.
Its a vastly improved picture 20 months on and an increase in the prevalence of border closures is going to be minimal and even highly cautious Australia has started to accept incoming long haul flights. High infection rates are no longer a precursor to 3 month lockdowns and travel restrictions and EU are experiencing vaccination wane now as they were behind UK in vaccine race so following UK’s experience but I doubt they’ll reach Johnson’s gung ho 1in 50 levels of infection.
Personally, I can’t see this dropping to March 2020 levels and by next Spring an SP of 300p is not a pie in the sky expectation .