UK “traffic light system” gives a red light to aviation

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Stewart Wingate, CEO, Gatwick stated: “It is bitterly disappointing news for our impacted passengers and airlines that Portugal is to be added to the “amber” list from next week while no further destinations are being opened up for “green” travel.  While it is in all of our interests to ensure that we only take forward steps out of the pandemic, we hope that the rest of Europe follows the UK’s speed of public vaccination so that safe and easy travel to and from the UK becomes a reality quickly, particularly as travel between mainland European countries is opening up already.  As the UK remains focussed on its final easing out of lockdown at the end of June, we remain optimistic  that Summer holidays abroad will be a reality for the many people desperate to reunite with friends and family or enjoy a well-earned break.”

Mark Simpson, equity analyst at Goodbody commented: “The UK Government’s decision to shorten its travel destination green list saw a sharp decline in share prices as the market will need to adjust down forecasts for this year and raise cash needs for the industry. The universally negative response is not surprising given the downgrading of Portugal from green to amber after only three weeks, with the country the only real summer holiday destination previously on the green list.

“This ‘stop, go, stop’ decision making by the UK Government makes scheduling future capacity almost impossible for airlines, with all the cost implications this have in terms of readying aircraft and staff for deployment and then having to stand them down again. Further, it will undermine customers’ confidence in making bookings given the uncertainty that the status of any destination could change when they are abroad. As a result, we would expect the booking window to tighten again as a result of the decision made to change Portugal’s status to amber.

“Potentially we might see a further round of funding made available, such as the CCFF scheme accessed last year, although the industry would prefer the loosening of travel restrictions as the answer to this concern.

“Overall, progress to recovery was never going to be a straight line, with the Delta variant proving to be a concern that is currently looking to be delaying a wider lowering of barriers by some three to four weeks. This is why a number of airlines were cautioning the market that losses this year may be bigger than consensus indicated at the time of their recent results.”