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Highlights
- The travel industry has called on the UK government to scrap international passengers’ testing rules as it would hurt the sector and not affect Omicron’s spread.
- The Manchester Airports Group and Airlines UK industry groups cited research commissioned by them which found that covid testing would not cause higher overall covid-19 case rates and impact certain other rates in the UK.
- Additional testing rules were implemented in November and December last year to contain Omicron’s spread.
The Manchester Airports Group (MAG) and trade body Airlines UK called on the UK government to scrap all other remaining covid-19 testing rules for international passengers. The call comes as the group is of the opinion that it will hamper the travel sector and would not impact Omicron’s spread.
The two groups cited findings from research, which was commissioned by them that the scrapping of such restrictions would not materially impact case rates and impact some other rates in the country.
In the UK, additional travel restrictions had been introduced in November and December last year due to the emergence of the Omicron variant.
MAG said that its airport passengers’ figures dropped by over 30 per cent at the beginning of December following the new rules. MAG handles the Manchester, Stansted, and East Midlands airports in the UK.
Here are 2 stocks FTSE-listed aviation stocks that are likely to benefit from the further relaxation in rules. Let us explore their investment prospects, given this background:
- EasyJet Plc (LON: EZJ)
EasyJet is a low-cost airline, which is a part of the FTSE 250 index.
The airline forecasted its Q4 2022 capacity to likely rebound to its pre-pandemic levels last seen in Q4 2019. It aims to increase its capacity levels to 2019 (pre-pandemic) levels by 2023 and forecasted its EBITDAR margin to be in the mid-teens in the medium term.
And its outlook for its return on capital employed (ROCE) in the medium term is in the low to mid-teens.
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The airline’s shares surged by 1.51 per cent on 5 January 2022 to close at GBX 616.60. The FTSE 250 index was at 23,849.40, down by 0.20 per cent. The group’s market cap was at £4,214.54 million.
- International Consolidated Airlines Group S.A. (LON: IAG)
International Consolidated Airlines Group is a multinational airline holding group. British Airways is one of its subsidiaries. IAG’s passenger revenue, for the 9 months to 30 September, was at EUR 3,140 million from EUR 4,828 million in the year before.
Whereas the company’s cash and interest-bearing deposits during the period increased by 28.8 per cent to EUR 7,619 million, from EUR 5,917 million in the year before.
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The airline’s shares rose by 1.45 per cent, on 5 January 2022 to close at GBX 160.18. The FTSE 100 index was at 7,521.21, up by 0.21 per cent.
The group’s market cap was at £7,068.70 million, and it has given shareholders a return of7.61 per cent in the last one year, as of 5 January.
