EasyJet (LON: EZJ) & cruise operator Carnival (LON:CCL) are set to lose their places on the FTSE 100 due to the COVID-19 impact on the travel industry which saw the companies shed a significant amount of their value.
The budget airline has lost half of its market value since the start of the pandemic as almost all flights have been cancelled.
Despite a recent recovery its market capitalisation was ranked 125th based on Monday’s stock market close in London.
FTSE Russell, requires companies to be ranked at least 110th to be part of the blue-chip index.
EasyJet, which plans to cut up to 4,500 jobs and reduce its fleet, had returned to the FTSE 100 at the end of last year after a fall in its shares had triggered removal from the index.
“EasyJet would need a big rally, but it could come back in September,” said Russ Mould, investment director at AJ Bell.
Carnival, the world’s largest cruise operator, has seen its shares drop by 70% since the start of 2020 as COVID-19 took hold. The cruise industry has been among the most heavily impacted sectors as several ships were hit by outbreaks of infection, and some cruises have been cancelled until at least October.
The travel sector has seen a strong rally over the last week but it’s not been enough to keep the stocks in London’s leading index.
Companies set to be promoted from the FTSE 250 include Avast and Ladbrokes and bwin owner GVC, (LON: GVC) which many investors thought would suffer greatly from the crisis with so many sporting events cancelled.
“Unlike some other operators GVC has multiple strings to its bow, and its online casino business has seen a modest rise in activity”, Nicholas Hyett, an analyst at Hargreaves Lansdown wrote in a note to clients.