Airline Bookings Surge, Buoyed by U.K. Plans to Reopen Travel
(Bloomberg) -- U.K. holidaymakers reappeared with a roar, showering airlines with summer bookings after Prime Minister Boris Johnson outlined a roadmap for air travel to return.
EasyJet Plc ticket sales more than quadrupled in the hours after Johnson said Monday that international trips may restart as soon as May 17. Tour operator TUI AG said reservations to Spain, Turkey and Greece jumped sixfold overnight, while Ryanair Holdings Plc cited Italy as another popular destination.
Airline shares advanced for a second day as evidence mounted of burgeoning customer demand for the crucial summer season. While travel could open as soon as late May or June, Britons are hedging their bets, with the uptick concentrated on July and August. Price-comparison site Skyscanner said that flight bookings on Monday increased by 69% compared with the previous day.
“We are seeing this latest news translate into a surge in travel demand,” said Hugh Aikten, vice president of flights at Skyscanner. Ultimately, he said, further steps will be needed to truly unlock demand, “including greater global alignment on common, international standards to enable people to plan.”
Shares of EasyJet rose 4.5% in London on Tuesday, a day after gaining 7.3% in response to Johnson’s plan to gradually reopen the economy. TUI advanced 2.6%, adding to an 8.7% jump, and British Airways parent IAG SA rose 2% following a 7.4% advance Monday.
There’s also evidence of growing confidence in long-haul markets, with Virgin Atlantic Airways Ltd. reaping a ninefold increase in web bookings on Monday compared with a week earlier, led by Caribbean destinations such as Barbados. Florida sales tripled.
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Britain has established a task force that will set out a roadmap for when international travel might resume, with a report due by April 12. Questions still remain about requirements for testing and quarantines.
EasyJet said late Monday that sales of holidays climbed even more than demand for flights, soaring 630%. That may reflect the added legal protection that comes with booking accommodation as part of a package.
Sunny spots such as Malaga, Alicante and Palma in Spain, Faro in Portugal and the Greek island of Crete are among top destinations, the low-cost carrier said. While travel may reopen sooner, August is the most popular period.
Bookings from Britons have begun to surge at the 21-floor Madeira Centro Hotel in Benidorm on Spain’s Costa Blanca, according to commercial manager Juan Natera, who said that reservations are strong for August and September, extending into the fall.
The picture elsewhere is less clear, with some hoteliers in Portugal suggesting sales are being held up because the country is on the current U.K. red list, from which returning Brits must quarantine in a hotel.
“We have had an increase in inquiries but a limited amount of firm bookings,” said Adrian Bridge, who heads the five-star Yeatman Hotel overlooking the river Douro in the city of Porto.
Goncalo Rebelo de Almeida of Vila Gale Hotels, one of Portugal’s biggest lodging providers, said he still has positive expectations, especially for the Algarve beach region, though it may be May or June before trends are clear. Brits are the biggest visitors, with tourism accounting for 15% of the economy.
Michalis Vlatakis, president of the Association of Cretan Tourism and Travel Agencies, said that a sustained rebound in bookings will depend on the roll-out of vaccinations and decisions by Greek authorities.
“Tourism is psychology and the right psychology must be created for people to travel,” Vlatakis said.
What Bloomberg Intelligence says:
“We believe demand will recover quickest at Ryanair, Wizz Air and other low-cost carriers. A slower pace is likely at full-service airlines such as IAG, as the rebound in long-haul travel may not be as quick”
-- Rob Barnett, BI analyst
While the upturn in U.K. ticket sales validates optimism about demand, the outlook for travel in the early part of summer remains cloudy.
TUI will seek to encourage customers to take a break after May 17, when the current ban on tourist travel potentially ends, by extending a policy allowing them to rebook for free until the end of June.
“We will continue to work closely with the government so people can look forward to a well-deserved break away, after what has been a very difficult year,” said Andrew Flintham, managing director of TUI UK and Ireland.
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