ROUND £500 million was added to the value of large airline shares today as the UK eases entry rules for 47 countries subject to the strictest COVID-19 restrictions.
It gives investors and managers new hope that the airline will survive one of the toughest periods in industry history.
EasyJet had to raise £1.2 billion from shareholders last month to improve its balance sheet. It also rejected a cheeky takeover bid from rival Wizz Air. Ryanair boss Michael O’Leary said airlines other than him would have to merge to survive.
BA owner IAG led the risers, up 5% to 182p. The stock fell to 91p a year ago.
Ryanair, Jet2 and EasyJet were also adding £500 million to shareholder value, according to data from share dealing app Double.
Air and travel stocks rose across Europe, with Lufthansa, On the Beach and WH Smith rising.
Hotel stocks also rose. Premier Inn owner Whitbread rose from 44p to 3259p, IHG from 40p to 4934p.
Last night the Transportation Department said visitors from places including South Africa, Mexico and Brazil no longer required a 10-day hotel quarantine. Only seven nations – all in Latin America – will remain on the so-called red list after the changes take effect on Monday.
British Airways chief executive Sean Doyle said: “It seems we are finally seeing the light at the end of a very long tunnel.”
This is the second good news for airlines this week.
Two days ago the competition watchdog closed its investigation whether Ryanair and British Airways (BA) broke consumer law by failing to offer refunds for flights that customers were unable to take during the lockdown coronavirus pandemic.
The Competition and Markets Authority (CMA) said that customers who cannot take flights should be offered a full refund, but the investigation would take too long and could be justified to the taxpayer.
**British Airways has revived its plan for a short-haul subsidiary at Gatwick Airport after striking a deal with pilots.
Pilots’ union Balpa says its members have approved a revised proposal on wages and working hours after an initial proposal was rejected last month.
BA still has to make agreements with the cabin crew and other staff.
The airline said: “We will now further develop our proposition to provide a full-service short-haul ancillary operation at Gatwick while offering our customers competitive fares.”
It is not clear whether BA can make short-haul flights profitable. It acknowledges that they were making losses even before Covid and needed to reach a “competitive and sustainable operating cost base”.