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Airline shares plummet as doubts over international travel intensify

Airlines underprepared for further travel ban

Shares in airlines and other travel firms took a dip early on Monday, as cases of coronavirus are rising in Europe, and the vaccine roll-out looks as though it could stall.

IAG, owner of British Airways, fell by 15%, before recovering somewhat, while easyJet and Ryanair dropped by 7% each.

Fears are mounting that the UK will extend its ban on non-essential international travel into the vital summer period, starving airlines of their source of revenue that they have missed out on during lockdowns.

Scientific experts and government advisors are warning the Prime Minister to think twice before allowing international travel again.

“I don’t think people should be planning on summer holidays abroad until next year,” said Prof Kamlesh Khunti, a member of the Scientific Advisory Group for Emergencies (Sage) and Independent Sage at the University of Leicester.

“It’s been a hard lockdown, we are doing so well, we cannot jeopardise this now. Our rates are coming down, our vaccination [rate] is fantastic, and the biggest fear we have is new variants that the vaccines don’t work as well against.”

Russ Mould, investment director at AJ Bell, suggests airlines didn’t properly consider the possibility that travel could be banned well into summer 2021.

“Airlines and travel operators had seemingly refused to countenance the cataclysmic idea of another heavily disrupted summer and had been busily advertising to an increasingly inoculated UK population,” Mould said.

“The risk, and one being increasingly acknowledged by Government ministers, is this summer is even worse than last for the travel space as the UK keeps restrictions in place to avoid undermining its hard-won success with the vaccine,” Mould adds.

Helen Whatley, the social care minister said rising Covid-19 infection rates in Europe added to uncertainty that UK arrivals would be allowed to travel freely this summer.

“My advice would be to anybody right now is just to hold off on booking international travel,” she told the BBC. It just feels pre-mature to be booking international holidays at the moment.”

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