Security concerns stall travel stocks

Security concerns stall travel stocks
Security concerns stall travel stocks

It's a picture postcard country wherever you go, but the serenity that surrounds France has been tainted by recent terror attacks and the ripples are far reaching.

On Thursday, Britain's EasyJet said trading prospects were so uncertain, it can't even give a profit forecast.

The airline citing security concerns and currency volatility as two key reasons why.

Ken Odeluga from City Index said: "Paris at one point was the most visited city in the world, we have seen those numbers fall markedly, double digit percentages since the middle of last year."

Geopolitical risk in Turkey is also causing airline profits to stall.

Add to that a drop in the value of the pound, which has made going on holiday in Europe more expensive for Britons.

Since the UK voted to leave the EU, easyJet's stock has lost a third of its value.

Lufthansa, Germany's largest airline cut its full-year profit target on Wednesday.

While travel operators have already seen a sharp fall in their share price - TUI down 20 per cent this year, Thomas Cook 48%.

Ken added: "It's the smaller ones, Thomas Cook and whether they are large or small the airlines which are right at the sharp end are the ones we should be worried about, but for easyJet and Ryanair, their market positioning puts them far far ahead, they can withstand this type of thing for many many years."

France has extended its state of emergency and taken additional measures to boost security, especially in places popular with tourists.

But airlines may be forced to change direction - and steer passengers towards less risky countries if they want to see an uplift profits.