Travel stocks head lower as EU tightens guidance on US travel

·2 min read
London, United Kingdom, August 2, 2021. Travellers arrive at London Luton Airport as Coronavirus restrictions ease for fully vaccined travelers coming to England. (Photo by Dominika Zarzycka/Sipa USA)
The guidance, released on Monday, reverses previous advice from June which lifted restrictions on American travellers ahead of the busy summer season. Photo: Dominika Zarzycka/Sipa USA

Travel and airline stocks were among the top fallers in the FTSE 100 (^FTSE) on Tuesday morning in London, as the EU moved to tighten up non-essential travel to and from the US.

Surging COVID-19 cases led to the decision as daily numbers in the US moved above 100,000 for the first time since last winter.

Caseloads are rising nationwide in the US, however the most severe pocket of infections is currently in the south.

Stocks moved lower as investors fretted about infections potentially cutting into a late-summer travel uptick.  

International Consolidated Airlines Group (IAG.L), the carrier that operates British Airways, headed 2.9% lower by 9.15am in London. Jet engine maker Rolls Royce (RR.L) also fell 1.8% following the news. 

Budget airline Ryanair (RYA.L) also fell around 2.6% and EasyJet (EZJ.L) was down 2.5%. WizzAir (WIZZ.L) was around 3.6% lower by the same time. Travel company Tui (TUI.L) lost 1%.

The guidance, released on Monday, reverses previous advice from June which lifted restrictions on American travellers ahead of the busy summer season. 

It is non-binding, meaning individual countries will be allowed to decide if they still wish to allow US visitors with proof of vaccination, negative tests, or quarantine.

Though the EU first lifted travel restrictions on Americans in June, the US has kept their ban on European non-essential travel in place since March 2020.

Florida has more than 16,000 COVID-19 patients in hospital — the most of any state — followed by Texas and California, according to data from the US Department of Health and Human Services.

Read more: FTSE 100 unmoved by strong UK business confidence read

Travel stocks had taken a tumble in Friday's trading session too even as the UK added seven countries to its green list for travel. 

The UK government announced that from 30 August, Canada, Denmark, Finland, Liechtenstein, Lithuania, Switzerland and the Azores will be added to the green list, as it believes the risk that travel from these countries poses to public health in the UK is low.

This means travellers from these destinations will not have to quarantine regardless of whether they are fully vaccinated, although they still need to be tested before their departure and on day two of arrival back in the UK.

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