The EU has reached an agreement on its Digital Covid Certificate to make travelling easier
As travel slowly begins to reopen, budget airline companies are likely to see their share prices rise. That is the view of HSBC, which has upgraded both Ryanair and easyJet to ‘buy’ ratings.
The EU has reached an agreement on its Digital Covid Certificate to make travelling easier, and HSBC sees this as a turning point in allowing the aviation industry to make up lost ground.
The European Union looks set to open its borders to visitors from non-EU countries, while HSBC expects the UK to ease its current restrictions, but says it cannot predict when or how.
“The EU is also opening up to visitors from outside the EU, subject to vaccinations or testing. Whilst UK policy is not easily predicted, we expect UK travel restrictions to ease. We think the US may soon rescind its Executive Order banning UK and EU travellers entering the US,” the broker said.
“We see the EU moving fast to reopen the US-EU market. This could prompt the opening of the US-UK market. Once the US is defined as a green territory under the UK traffic light system, we would see pressure to open European destinations.”
News that ministers are considering the use of vaccine passports to allow for foreign holidays this summer gave a much-needed boost to shares in airlines and travel companies yesterday.
“British Airways owner IAG was one of the FTSE 100’s top gainers finishing up 1.86%. Over on the FTSE 250 EasyJet also jumped 2.44% and travel company TUI gained 2.43%. Some summer has to be better than no summer at all for the sector. Without it, ABTA has warned that more than half of SME travel agents believe they won’t survive,” said Danni Hewson, AJ Bell financial analyst.
