AUS
NZ
UK
CA
USA
IND
Summary
- Will boost UK’s summer holiday prospects with up to 12 nations
- Announcement expected on June 29 this year
- Rail and ferry travel might also be included
- A close look at IAG, easyJet and Ryanair stocks
Ministers in the United Kingdom are in talks with many countries in the European region, and also with Australia, to make air bridges that allow free air travel between Britain and each of these nations. This will allow British citizens to plan holidays this summer season and choose these countries as their travel destination.
Grant Shapps, Transport Secretary, UK said that the government is also mulling over inclusion of rail and ferry movements in the proposed travel corridors arrangement.
The countries are being chosen based on their low corona infections in the present circumstances when the UK is grappling with the COVID-19 flu disease, and taking all the necessary precautions so that it subsides as quickly as possible. Countries are being ranked under high, medium and low risk zones.
As a definition, an air bridge between two nations will allow passengers flying from either side to forego a two-week quarantine requirement once they land in the other country. Right now, for any passenger coming into Britain through the air route, it is mandatory that he or she undergoes a 14-day quarantine before he can initiate his holiday or work related travel in the country. If the rule is flouted a 1000 dollar pound fine is imposed.
According to government sources, there are twelve countries under consideration for this travel corridor proposal. They are Croatia, France, Greece, Italy, Spain, Turkey and Australia, and a few others, as the complete list is yet to be released. While Singapore and Bermuda are also under the government radar, but they may get a second preference, given the UK’s inclination to open free travel first with the European nations. The final list of countries shall be drawn-out based on the rate of corona infections per 10 million of a nation’s population.
The European Commission (EC) remarked that while it is a welcome move, but at the same time, Britain should not distinguish between its member countries except from the infection rate standpoint. It should not be the case that amongst all the countries with similar low infection rate, Britain picks and chooses few and leaves others. That will be discriminatory in the EC’s opinion. Back home in London, Dominic Raab, the British Foreign Secretary had also opined similar views earlier, saying that any such discriminatory policy can easily be challenged in the courts of law.
As a good news from the other side, Spain has already allowed British travelers to enter the country without any self-quarantine requirements.
The UK government will be reviewing its ongoing two week quarantine policy on June 29 this year, which is currently applicable to all the flights landing in Britain. The proposed air-corridors are expected to be announced on the same day. The airline companies in the UK are unhappy with this decision and say that it is dampening their business revenues. In fact, few days back IAG, easyJet and Ryanair had initiated legal proceeding against the British government on the quarantine rules, stating that this measure will delay recovery of the already struggling travel sector in the country.
Many members of the Parliament have also criticized this blanket quarantine rule for similar reasons.
The UK travel and holiday sector is in a dire situation, struggling to pay salaries to its employees, laying off workforce, and running out of cash reserves. The industry has very less business due to the widespread corona pandemic across the world, during an otherwise peak-demand season of summer holidays.
Coincidently, the British Prime Minister Boris Johnson has also announced that staycations will be allowed in the country from July 4 this year, but with strict cleanliness and safety regulations in place.
Let us have a closer look at three prominent airline companies in the UK namely IAG, easyJet and Ryanair.
All these three companies have been badly hit due to the negative effects of the coronavirus pandemic throughout the United Kingdom. But its expected that with the hopes of air corridors being coming in place soon, their share prices will also start to look up.
International Consolidated Airlines Group SA (LON:IAG) – IAG is the multinational airlines group based out of London, UK. It owns British Airways as a parent company and has recently hired Goldman Sachs and Morgan Stanley to finetune its business strategy in these testing corona times. In the past, British Airways had announced laying off 12000 workers which triggered a political debate.
The IAG stock was trading at 242.00 GBX on June 24 at 9.50 am GMT+1, down by 3.89 percent. The stock’s market capitalization totaled at 4.81 billion pounds at the same time. Its 52-wk high/low was recorded at 671.00/168.20 points.
easyJet Plc (LSE:EZJ) – EZJ is a low cost British airline. The company management has predicted that the air traffic levels will return to normal only by the year 2023. It is deferring buying out any new planes for the time being. The company stock traded at 758.40 GBX, down by 3.71 percentage points on June 24 at 10.24 am GMT+1. Its 52-wk high/low was recorded at 1,552.00/475.00 points.
Ryanair Holdings Plc (LON:RYA) – Ryanair is an Irish budget airline with operational bases at Dublin and London. The company’s air traffic plummeted considerably in May this year, dropping by 99.5 percent, compared to the same month last year in 2019, as corona led closed airspaces impacted its business. The airline does not foresee any turnaround in the month of June as well.
The company stock traded at 11.29 EUR, down by 0.92 percentage points on June 24 at 10.27 am GMT+1. Its 52-wk high/low was recorded at 16.10/8.14 points. It has a market capitalization of €11,233.25 million.
