Shares in UK and French travel, hotel, and airline companies have taken a hammering after the government’s decision to take France off the safe-country list and impose a two-week quarantine on travellers.
With France, the second-most-popular destination for British travellers – joining Spain, the most popular – on the UK’s government quarantine list, rattled investors sent shares tumbling across a broad range of companies with any involvement in the travel and hospitality sectors.
The widespread sell-off in shares, which included the airport shop owner WH Smith, the jet engine maker Rolls-Royce and the Eurotunnel operator, Getlink, helped drive the FTSE 100 down 120 points, or almost 2%, and the Europe-wide Stoxx 600 index down 1.1% in early trading on Friday.
IAG, which owns British Airways, tumbled more than 6% in early trading, making it the biggest faller in the FTSE 100. It is the latest blow for the company, which is in the process of cutting 12,000 staff after reporting a record loss of €4.2bn (£3.8bn) in the first half of the year as passenger numbers collapsed by 98%.
The struggling travel group Tui, Europe’s biggest tour company, which earlier this week revealed it had lost £1.8bn so far this year because of the travel lockdown, fell 4.7%.
The low-cost airline easyJet, which on Friday announced it had made $771m (£608m) from the sale and leaseback of 23 aircraft, tumbled 7%, while Ryanair fell by 4.5%.
Hotel groups have also taken a hit, with Intercontinental down 2.8%, Whitbread down 2.6% and Accor off 2%.
Air France fell by almost 6% in early trading while ADP, which runs Paris’s airports, dropped by 2%. Getlink fell by 2.5%.
From 4am on Saturday those arriving in the UK from France will have to quarantine for 14 days or face a fine, throwing hundreds of thousands of holidaymakers’ plans into chaos.
Rolls-Royce, which makes engines for the aviation industry, was down 4%. WH Smith, a fixture in airports and rail stations, dropped by more than 4%.
The move to remove France from the safe-travel list follows a record post-lockdown number of new coronavirus cases reported by the country of 2,669 on Thursday. Clément Beaune, the French junior minister for European affairs, suggested that France might reciprocate the UK’s move.
Spain, the UK’s favourite tourist destination, was removed from the safe-corridor list on 26 July.