Shares in the UK’s largest airlines tumbled more than three per cent this afternoon as the health secretary’s announcement of new hotel quarantine measures spelt prolonged chaos for the travel industry.
Easyjet shares fell more than 4.5 per cent to 788p, while Tui shed 4 per cent and British Airways owner IAG dropped 3.3 per cent.
Jet2, the UK’s third-largest airline, saw shares fall 3.7 per cent after it announced the suspension of all flights until 14 April as a result of the “ongoing uncertainty” caused by the fresh measures. The airline will automatically cancel affected bookings with a full refund.
It comes after Matt Hancock this afternoon unveiled a 10-day mandatory hotel quarantine for all arrivals to the UK from 33 “red list” countries most at risk of carrying emerging Covid variants.
All passengers will also be required to take a pre-departure Covid test, plus further tests on their second and eighth days of quarantine.
The government will roll out unexpectedly tough enforcement of the measures, with fines of up to £10,000 and possible 10-year prison sentences for those who fail to comply.
The hotel quarantine scheme will cost £1,750 per person, in a package that will cover hotel stays, transport and testing.
Hancock said full details would be announced on Thursday after being pressed by Labour on when the restrictions will be eased.
But the announcement sparked widespread backlash from businesses in the travel sector, which have remained stalled for months during national lockdown measures.
Karen Dee, chief executive of the Airport Operators Association and Tim Alderslade, chief executive of Airlines UK, called for a firm exit strategy from the sweeping restrictions.
“Whilst public health must come first, this latest measure means all travellers to the UK will need to take three tests in addition to quarantine, they said in a joint statement. “It adds a further barrier to viable air travel and deepens the worsening 2021 outlook for our sector, which has already been largely grounded for a year.”
Matthew Fell, chief UK policy director at the Confederation of British Industry (CBI) said the new quarantine rules and testing requirements would come as a further blow to the airlines, which have seen revenues decimated by the coronavirus crisis.
“Immediate support is now essential to protect companies and jobs in the aviation sector and its supply chains in the difficult months ahead,” he said. “The government should also be clear on a road map to relaxing restrictions when health data permits.
“The UK’s world-class aviation sector — which underpins so much of our economic activity — must be supported so that it can play its full part in the country’s recovery.”
Last month, the UK’s Aviation and Aerospace industries called on the Prime Minister to roll out a financial support package for the sector after the government ditched all travel corridors with the UK.
Britain’s biggest aviation bodies called for measures including a 12 month waiver from Air Passenger Duty, business rates relief for firms in the industry, and access to fresh funding.
A group of more than 80 MPs expressed their support for the demands in a letter to Boris Johnson urging the government to bring forward plans to protect the embattled industries.