Following the government’s decision on Thursday to take Portugal off the green list and not adding any more countries for holidays, more than £2bn has been wiped off airline and holiday firms.
Because the government did not place anymore countries on the green list EasyJet, British Airways owner IAG, Ryanair, TUI, Wizz Air and engine maker Rolls-Royce suffered heavy losses.
Once the stock market had closed on Thursday the government made the decision, but with the rumours spreading was more than enough to hundreds of millions lost, devaluing airlines.
Ryanair shares dropped 4.5%, wiping £750m off the company, whilst EasyJet shares closed down 5.1%, wiping off £215m.
British Airways owner, IAG saw shares close down 5.4%, which wiped out almost £550m off their value.
Wizz Air shares sunk 3.8% or £234m, whilst the UK’s largest tour operator, TUI saw their shares plummet by 4.5% or £203m, and Rolls-Royce lost 2.3% of its value or £218m.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said, “High hopes that brighter skies were in sight for the airlines have been brought back down to earth with a bump after the UK government brought in even stricter controls on key holiday routes.
“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.
“The situation is also being seen as a drag on the fortunes of Rolls Royce, the aircraft engine manufacturer and supplier of maintenance for jets, as recovery in its commercial business retreats a little further on the horizon.
“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.”