Travel, leisure and transport stocks pared some of their losses on Tuesday, following a major hit on Monday after a new variant of the coronavirus forced the UK government to introduce fresh lockdown measures and more than 40 countries imposed travel bans on the UK.
British Airways owner IAG (IAG.L), which had slumped as much as 16% after the opening bell on Monday, closed roughly 5% higher on Tuesday.
Ryanair (RYA.L) was one of the few travel stocks that was down Tuesday morning, although it closed 0.5% higher.
This comes as the airline announced it has cancelled some UK domestic services after it claimed the country’s Civil Aviation Authority imposed rules that made the operation of those flights impossible. However, the CAA has said the rules aren’t new.
Thomas Hayes, chairman and managing member of Great Hill Capital, said information and clarification around COVID-19 vaccines could be one reason the market has calmed, which has impacted travel stocks as well.
“Following the scare of the ‘new strain’ mutation of COVID-19 over the weekend, many doctors and experts were out saying that the vaccines we have will be effective against it. Even in the low probability scenario that the current vaccine did not work against the new strain it would be relatively easy to adjust the vaccines to protect against this variant,” he explained.
On Monday, countries around the world began closing their borders to the UK, after a new, rapidly transmittable strain of COVID-19 was detected on UK shores, which could be 70% more infectious.
The tide began on Sunday morning when the Netherlands said it would stop outgoing flights from the UK. Several nations quickly followed suit.
Now, more than 40 countries have imposed travel bans on the UK, some for at least 48 hours while leaders come up with a plan for stemming the spread, some until the end of January. The list includes Saudi Arabia, Israel, Oman, Hong Kong and Sudan.
Airlines have been rushing to amend flight schedules and bookings as countries around the world closed their borders to the UK.
So far, the new strain has also been detected in the Netherlands, Denmark, Australia and South Africa.
The BBC reported that EU officials are discussing a joint response to the new COVID-19 variant, but a unilateral decision is not expected until Tuesday on whether to halt travel.
There have been worries around the country about the travel ban causing food shortages. The UK government tried to calm the nation in a press conference on Monday by saying that delay in supplies will only affect a small minority of food and medicine coming into Britain.
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