- Airlines will now be able to cancel flights without incurring penalties.
- Travellers are likely to face more chaos at the airports following the announcement.
Amid the cancellations of hundreds of flights to and from the UK every day, travellers have been witnessing chaos at the airports for the past few months. Several people have had their holiday plans ruined in these months due to the axed flights. However, the problems are set to increase further with the latest development.
The government has now given a green signal to the airlines to cancel flights this summer without being fined.
Under the 'airline slot amnesty', airlines have been allowed to ground the flight without incurring any penalty for not using their airport slot. The slots are granted to airlines to take off and land at a particular time on a specific day at busy airports to manage the capacity. However, to keep these slots, the airlines must use them a particular number of times each season.
The new scheme will let them use these slots more efficiently without the risk of losing them.
© 2022 Kalkine Media®
To be able to avail the scheme, airlines must finalise their summer schedule by 8 July.
Notably, airlines have been cancelling flights due to the shortage of staff. They are unable to quickly recruit more staff in line with the rise in demand, resulting in long queues at airports.
The airlines claim that the security clearance process, which earlier took about four weeks, is now taking as much as three months to complete.
Let us check out some FTSE-listed airline stocks and how they reacted to the development.
International Consolidated Airlines (LON: IAG)
International Consolidated Airlines owns UK's flagship carrier British Airways (BA). On Monday, BA said that the government's measures would provide 'certainty' to the customers.
The FTSE 100-listed company holds a market cap of £5,390.50 million at present, and its share value has declined by over 40% in the past 12 months. The earnings per share (EPS) stands at -0.59. The stock price stood at GBX 107.10, down by 1.60%, as of 12:47 am on Monday.
EasyJet Plc (LON: EZJ)
EasyJet or easyJet is an affordable and leading airline in the UK. With a market cap of £2,856.94 million, the airline is a constituent of the FTSE 250 index. The value of its stock has depreciated by over 60% in the past 12 months and by -34.41% on a year-to-date basis. The shares were trading at GBX 364.60, down 3.26%, as of 12:56 pm GMT+1 on 4 July 2022.
Wizz Air Holdings Plc (LON: WIZZ)
Wizz Air Holdings is a Swiss-based airline and a constituent of the mid-cap-focused FTSE 250 index. Its stock hasn't given a significant performance in the past one year as the value has plunged by 62.76%. The year-to-date return is currently at -57.09%. Shares of the company were 3.36% down at GBX 1,796.00 as of 1:01 pm GMT+1 on 4 July 2022.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.