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Highlights
- Travel rules in the UK are set to change ahead of October half-term break, which might benefit the listed travel stocks.
- The number of countries on the red list might also be reduced further from the current number of 62 countries.
Travel rules set by the UK government is set to undergo major changes. New rules will be more straightforward and less confusing. As per the general expectations, a fully vaccinated person can travel without taking a PCR or lateral flow test, which will reduce the travel cost by £100 per trip.
Also, different categories like green and amber lists will be merged into a single category of low-risk countries. At the same time, the number of countries on the red list might also be reduced further from the current number of 62 countries.
Which FTSE travel stocks to buy ahead of major changes in rules?
However, travelling for those who have not taken the vaccine might get tougher. Travellers from the red list countries will have to spend 11 days in the quarantine hotel at the cost of £2,285, while travellers arriving from the low-risk location must home quarantine and be required to take two tests. The new rules might come into force ahead of the October half-term break, which is a high travelling period and might benefit travel-related stock.
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Let us look at FTSE listed travel stocks that could be positively impacted after the new travel rules:
Ryanair Holdings Plc (LON: RYA)
FTSE 250 listed airlines company operates across major destinations in Europe through its fleet of over 450 aircraft.
The company expects higher traffic growth over the next five years and has raised its five-year growth forecast from 33% to 50%. In addition, the airlines expect passenger traffic to rise over 225 million by March 2026 from pre-pandemic levels of 149 million traffic. To achieve the desired growth rate and capture the market opportunities, the airlines plan to buy additional 210 aircraft over the next five years.
Ryanair Holdings Plc’s shares traded at EUR 16.76, up by 0.78% on 17 September at 9.10 am GMT+1 with a market cap of £14,816 million. In the last one year, the stock has given a 34.61% return to the shareholder.
International Consolidated Airlines Group (LON: IAG)
British Airways owner IAG Group operates its services across Europe and other major destinations worldwide.
The company has seen a recovery in passenger traffic after an ease in restrictions. The company operates several airlines brands, and any positive news for the airlines sector will certainly benefit the company’s stock. Also, the company expects a recovery in passenger capacity to be at 45% of 2019 capacity, especially on the transatlantic route in the third quarter of this year.
IAG Group’s shares trade at GBX 148, up by 3.89% on 17 September at 9.10 am GMT+1 with a market cap of £7,067.35 million. In the last one year, the stock has given a 12.03% return to the shareholder.
Related Read: 5 travel stocks to buy as seven destinations gets added to COVID green list
EasyJet Plc (LON: EZJ)
The company operates in the budget airlines segment and flies to more than 30 countries with its fleet of over 340 aircraft.
The company reported passenger capacity at 17% in the third quarter, which is expected to rise to 60% of 2019 levels by the fourth quarter. To accelerate the recovery and protect from downside risk, the company plans to garner £1.2 billion through a right issue.
EasyJet Plc’s shares trade at GBX 599.60, down by 1.15% on 17 September at 9.10 am GMT+1 with a market cap of £4,598 million. In the last one year, the stock has given a 1.69% return to the shareholder.
