Travel stocks slump as Portugal axed from UK green list

LISBON, PORTUGAL - MAY 30: Mask-clad shoppers crowd Rua do Carmo on a Sunday sunny afternoon during the COVID-19 Coronavirus pandemic on May 30, 2021 in Lisbon, Portugal. Locals and tourists are seen again in the city streets as the epidemiological bulletin released today by the Directorate General of Health (DGS) reported 445 new cases of COVID-19 and no deaths in the last 24 hours. In total, Portugal registers 848,658 infections, 17,023 deaths and 808,813 recoveries. (Photo by Horacio Villalobos#Corbis/Corbis via Getty Images)
Scientists at the Joint Biosecurity Centre (JBC) are warning of rising COVID infection rates and the emergence of variants in Portugal. Rates rose from 33 cases to 51 cases per 100,000 on 2 June. Photo: Horacio Villalobos#Corbis/Corbis via Getty Images

Travel stocks nosedived into the red on Thursday as it was confirmed that Portugal will be removed from the UK’s green list as the government mulls stricter holiday restrictions.

British Airways owner IAG (IAG.L) fell over 5% on the back of the news, while Wizz Air Holdings (WIZZ.L) was down 4.1% and Ryanair (RYA.L) lost 4.4%.

Transport secretary Grant Shapps confirmed that from Tuesday, Portugal will be taken off the UK foreign travel green list, which currently allows travellers from those countries into England without having to self-isolate on arrival, while no new countries will be added.

The holiday destination is now on the amber list, meaning that travellers have to quarantine for 10 days on their return, as well as pay for two PCR tests.

Seven more countries are set to be added to the red travel list, those being Afghanistan, Bahrain, Costa Rica, Egypt, Sri Lanka, Sudan and Trinidad & Tobago. Anyone arriving from red destinations has to quarantine in a hotel at a cost of £1,750 ($2,481) per person.

"Caution is the name of the game for the British government, but it’s a hand dealt as a bitter blow to the travel industry," Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.

"As aircraft stay grounded, cash burn is likely to intensify eating into the financial buffers the airlines have built up through debt restructuring and rights issues. There is still a glimmer of hope that swift vaccination roll outs will make way for a late summer revival in fortunes, but the travel industry is now going to have to play an even bigger game of catch up."

It comes as UK prime minister Boris Johnson previously warned that the government would not hesitate to drop countries from the green list.

IAG fell almost 4% on the back of the news. Chart: Yahoo Finance
IAG fell over 5% on the back of the news. Chart: Yahoo Finance

Scientists at the Joint Biosecurity Centre (JBC) warned of rising COVID infection rates and the emergence of variants in Portugal. Rates rose from 33 cases to 51 cases per 100,000 on 2 June.

The country, along with 11 others, was rated green by UK ministers just three weeks ago.

"You've got to wait and see what the JBC says and what the recommendations are about travel,” Boris Johnson said on Wednesday.

“We're going to try to allow people to travel, as I know that many people want to, but we've got to be cautious and we've got to continue to put countries on the red list, on the amber list, when that is necessary.

"I want you to know we will have no hesitation in moving countries from the green list to the amber list to the red list, if we have to do so. The priority is to continue the vaccination rollout, to protect the people of this country."

Watch: COVID-19: Holiday hopes as green list review to be released - but Hancock warns UK has to 'protect the progress we have made'

Travel industry experts previously predicted that the Canary and Balearic islands could open up to tourism, and Malta, which only narrowly missed out on quarantine-free travel the last time the list was reviewed. Other European countries that were thought to make the green list were Finland and Poland.

Budget airline EasyJet (EZJ.L) also slumped 5.2% on Thursday after it was hit by a series of cancellations that sparked a wave of complaints among travellers.

The company said in response: “We want to fly as many customers on as many flights as possible this summer, however as all airlines have been doing throughout the pandemic, we continue to adjust our flying schedule based on the restrictions put in place by Governments to ensure our flying programme best matches demand.”

Read more: Flight availability for amber list countries jumps 300% despite UK travel warnings

Nick Thomas-Symonds, the shadow home secretary, said: “This is yet more evidence of the dangerous impact of Conservative chaos over travel planning,” he said. “This is causing ongoing confusion over the ‘amber list’ that is resulting in far too many people still travelling to COVID hotspots and mixing at airports, further increasing the risk of variants reaching the UK.

“Ministers need to scrap the ‘amber list’ urgently, to limit travellers reaching the UK and ensure that Border Force have the resources they need to manage arrivals from the ‘green list’ safely.”

The EU is set to examine the UK’s status again on 14 June.

Watch: Should I book a holiday in 2021?